Keith Hellawell, the embattled chairman of Sports Direct, is to continue in his role following a shareholder vote at the company’s general meeting today.
Hellawell gained the support of 80.9% of all shareholders, including chief executive Mike Ashley, who owns a 55% stake. However, 54% of independent shareholders voted against Hellawell’s re-election.
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 (annual general meeting).”
A majority of Sports Direct’s independent shareholders first voted against re-electing Hellawell at the retailer’s AGM in September 2016, amid growing concerns about the retailer’s trading and governance, as well as the treatment of workers at its Shirebrook warehouse.
Hellawell offered to resign, but was persuaded to stay “to assist with making further improvements”.
But under new regulations for listed companies, the outcome of the vote meant the resolution to re-elect Hellawell had to be put to all shareholders at a second meeting held within 90 to 120 days of the AGM. The meeting took place on 5 January.
Hellawell, who has been Sports Direct chairman since 2009, has now vowed to step down at the 2017 AGM if he fails to gain the support of its independent shareholders by then.
Ashley later said: “I have spoken to Keith 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 said the board will meet in the near future to reconsider all options in relation to its review of corporate governance, in view of “continuing frustrations”.