Sports Direct Keith Hellawell stays as chairman despite shareholder revolt
Independent shareholders have vented their anger at under-fire Sports Direct chairman Keith Hellawell, with 54% voting against his reappointment.
But the former West Yorkshire Police chief constable and government drugs tsar will remain in place after receiving the backing of 80.92% of all shareholders, which includes Sports Direct founder Mike Ashley, who owns 55% of the company.
Mr Hellawell has been accused by shareholders of overseeing a "catalogue of governance and operational failures" and his reappointment is likely to irk some of the group's investors, with Aberdeen Asset Management and Royal London having publicly opposed him prior to the vote.
Mr Ashley said: "Keith has my full backing and will be continuing in his role on the basis that he has the unanimous support of the board. I note that many of those who voted against Keith have acknowledged that we have made positive progress since the AGM."
Thursday's vote was triggered after more than half of the retailer's independent shareholders voted against Mr Hellawell's reappointment at September's tumultuous annual general meeting (AGM).
Mr Hellawell has gone on record to say he will stand down from the role should he be voted down again by minority shareholders at the 2017 AGM.
However, in a stock market announcement late in the day Mr Ashley issued another statement.
It read: "I have spoken to Keith Hellawell this afternoon to inform him that I hope that he will reconsider his intention to stand down if he does not receive the backing of a majority of independent shareholders at the 2017 AGM."
The company added that in view of "continuing frustrations", the Sports Direct board will meet in the "near future to reconsider all options in relation to its review of corporate governance".
The 74-year-old Mr Hellawell has presided over a long list of scandals and controversies at Sports Direct.
Last year Mr Ashley was hauled before MPs to be grilled over "Victorian" working conditions at the retailer's warehouse, the company hosted a farcical "open day" at its headquarters, and its chief executive Dave Forsey quit - to be replaced by Mr Ashley.
The Newcastle United FC owner admitted paying some staff below the minimum wage and was taken to task over the firm's controversial use of zero-hour contracts.
Profits at the group collapsed 57% in the first half of the year, although it did not stop Mr Ashley splashing out on a new corporate jet.
Late last year, the Financial Reporting Council announced an investigation into Sports Direct over the retailer's relationship with a firm owned by the tycoon's brother. Undeterred, Mr Ashley announced in December that the company had entered into an agreement with Double Take Limited, in which his daughter Matilda is a director.
Paul Lee, head of corporate governance at Aberdeen Asset Management, said the result of the vote was "no surprise" given the backing Mr Hellawell had from Mr Ashley.
He added: "The real test will come at the AGM, when Mr Hellawell has said he will step down if he does not receive the support of the majority of independent shareholders.
"This is not about personalities but the overall governance of the business. Much needs to be delivered by the AGM to win the support of independent shareholders.
"Progress needs to be made on a genuinely independent review of working practices and governance, the company needs to deliver on its undertakings to its workforce, including appointing an employee representative director, and it needs to enhance its reporting.
"We need to see progress towards appointing a new executive team with the necessary skill set and experience to manage a company of Sports Direct's size and scale."