Sports Direct shareholder holds 'trust' talks with troubled retailer
An influential shareholder group has said that it held "constructive" talks with the board of Sports Direct following the retailer's annual general meeting and open day on Wednesday.
The Investor Forum, consisting of investors holding assets worth more than £14 trillion, said discussions centred on how "trust can be re-built in the company and board".
The announcement comes after independent shareholders rebelled at the Mike Ashley-owned retailer's AGM, with 53% opposing the re-election of chairman Keith Hellawell.
Andy Griffiths, Forum's executive director, said: "Independent shareholders have sent a clear message to the board of Sports Direct through their votes at the AGM and in their public statements.
"We are encouraged by Sports Direct's recent open approach, publishing the working practices report and hosting an open day. These, however, are only the first steps in a long journey towards rebuilding trust and shareholder value."
The company has faced sharp criticism over corporate governance and working practices at its warehouse in Shirebrook, Derbyshire, after it was revealed that some warehouse staff were paid below the National Minimum Wage.
Sports Direct has moved to address concerns by offering casual retail staff guaranteed hours instead of zero-hours contracts and ensuring all warehouse staff are paid above National Minimum Wage following a review.
However, law firm RPC has been tasked with carrying out another "360" review.
Mr Griffiths added: "Our focus in the coming weeks will be on identifying key milestones to achieve this goal and, in particular, reaching agreement regarding the specific nature, remit and timing of the 360 and governance reviews. Facilitating a constructive dialogue on this will take on heightened importance over the next three months before the general meeting required to re-elect the chairman."
Mr Hellawell had offered his resignation at the weekend, but the former West Yorkshire Police chief constable said that he would remain in the role after the board unanimously backed him to continue.
Another shareholder group, the Pensions and Investment Research Consultants (Pirc), has warned Sports Direct's board of directors that they will face opposition if they attempt to join the boards of other public companies.
Mr Ashley, who owns 55% of Sports Direct, attempted to appease journalists and investors at the AGM by leading a walking tour of the Shirebrook warehouse to show how the board was turning the business around.
However, the move appeared to backfire after the billionaire retail tycoon drew fresh criticism for pulling out a wad of £50 notes as he emptied his pockets during a mock security search.