Sports Direct International plc will appoint a worker’s representative to its board of directors to give workers a voice following a review of work practices that have triggered criticism from regulators and the public.
The news came at an eventful shareholder meeting where directors revealed billionaire founder Mike Ashley confirmed he has no plans to take the company public.
The UK’s largest sporting goods, which has grown rapidly in Europe through acquisitions and unsuccessfully bid on some assets of Sports Authority earlier this year, released from a Working Practices Report Sept. 6 capturing progress made investigating, reviewing and addressing shortcomings in employment practices, including so-called “zero-hour contracts.” That process along with a review of the company’s corporate governance process will continue for another 12 months.
At Wednesday annual meeting, 80 percent of shareholders voted against a proposal to commission an independent review of Sports Direct’s “human capital management strategy.” However, 53 percent also voted against re-electing Keith Hellawell as the chairman of the board.
“I take this clear message from our independent shareholders seriously, and I will do my best to address their concerns and earn their confidence over the next year,” Hellawell said in a statement issued after the meeting. “I have confirmed today that should I not receive the support of a majority of our independent shareholders at next year’s AGM, I will step down at that time with immediate effect.”
At the meeting, Sports Direct issued the following guidance for fiscal 2017:
Underlying EBITDA in FY 2017 is expected to be in the region of £300 million, subject to:
- Group sales growth of at least 9 percent
- Group Gross margin decline of no worse than 275 bps
- Increase in operating costs of no worse than 8 percent
- No unforeseen significant items
- No material acquisitions
