Sports Direct chairman Keith Hellawell saved despite shareholder opposition
Shareholders have once again delivered a bloody nose to Keith Hellawell by opposing his reappointment to the retailer's board.
Thursday 5 January 2017 19:22, UK
Sports Direct founder Mike Ashley has rescued chairman Keith Hellawell for a second time after a fresh vote by independent investors rejecting his reappointment.
A previous vote by shareholders at a tumultuous AGM in September had seen Mr Hellawell's stewardship of the company - beset by allegations of corporate governance and working practice failures.
He was saved then mainly because of billionaire chief executive Mr Ashley's dominant voting rights.
Shareholders have now once again delivered a bloody nose to the company after a further vote on his re-election to the board - under City rules - at the firm's Derbyshire HQ, which also contains its controversial main warehouse.
This time a similar portion of independent shareholders - 54% - voted against Mr Hellawell.
Investors such as Aberdeen Asset Management and Royal London had publicly opposed him prior to the vote.
But the former West Yorkshire police chief and Government drugs czar will remain in place after receiving the backing of Mr Ashley, who owns 55% of the company.
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."
Mr Hellawell has previously pledged to resign should enough minority shareholders fail to back him at the next AGM - with Sports Direct urging investors to judge him on the success of its reforms.
However, Mr Ashley said in a fresh statement hours after the shareholder vote that he hoped the chairman would reconsider this intention.
The Sports Direct statement added that the board would "meet in the near future to reconsider all options in relation to its review of corporate governance".
The company endured a backlash from investors, unions and MPs in 2016 amid a bizarre chain of events that included politicians on a spot-check of Shirebrook claiming they were being secretly filmed.
Mr Ashley, who also owns Newcastle United, ordered a on pay, governance and working practices after admitting some staff were paid below the minimum wage.
However, a 25% dip in half-year profits announced in December prompted who accused the media, unions and politicians of giving the company a bad name through a "campaign" against Sports Direct.
Paul Lee, head of corporate governance at Aberdeen Asset Management, said it was no surprise that Mr Hellawell was re-elected given the continued support he enjoys from Mr Ashley.
But he said the "real test" would come at the AGM given Mr Hellawell's pledge on his future if he does not win back independent shareholder backing.
Mr Lee said: "Poor governance and oversight has dogged the company for far too long and more change is required.
"We welcome the board's recognition of this but words must now be matched with deeds."