Mike Ashley at Sports Direct has agreed with investors and initiated an independent review of working practices and corporate governance at what has become the political and shareholder lightning-rod sports retailer.
The so-called “360 degree” review, following Ashley’s fraught performance before MPs recently over working practices at Sports Direct’s warehouse in Derbyshire, was initially to be led by the retailer’s own lawyers, RPC.
Unsurprisingly, that didn’t wash with outsiders as it smacked, even if indirectly, of the company marking its own homework in terms of how staff are treated and how it is run.
In a welcome sign that Ashley does appear to be listening to rather than just hearing the criticisms levelled at his autocratic management style, the company says that following discussions with leading institutional shareholders in Sports Direct the review will now be led by “an independent party other than RPC”.
It is understood that the Investor Forum, speaking for investors in Sports Direct that hold total assets of £14 trillion, have been particularly influential in persuading Ashley to alter the basic form of the review.
A key factor in the change of heart was presumably also 53 per cent of independent shareholders – Ashley owns 55 per cent of the total shares – voting against the re-election of chairman Keith Hellawell at the recent AGM.
The boss seems to have understood that cosmetic change will not cut it in the current context of deep disquiet among shareholders and staff.
The root-and-branch review has to be independent and seen to be independent. In addition, Sports Direct said yesterday that the selection process for having a workers’ representative on the company’s board will be via democratic staff elections “in which all staff directly engaged or employed by Sports Direct may vote”.
Again, it has the feel of both olive branch and commonsense, and Ashley is to be congratulated for seeing it was the way forward if a line is to be drawn under the poor relations between all the parties.
It is no time to be crowing about climbdowns, U-turns or any of the other kneejerk vocabulary of confrontation. Sports Direct may have taken the scenic route but the direction of travel looks better.