Sports Direct has commissioned a further report on its corporate governance after publishing a much-anticipated report this week on its working practices.
The retailer, which became embroiled in controversy when The Guardian newspaper ran an exposé of working practices in one of its warehouses, published its report yesterday.
The company has agreed to change working conditions for employees including new guaranteed-hours contracts instead of zero-hour arrangements for shop staff; suspension of the company’s “six strikes” process for dismissing workers; and reform of the pay policy that saw many workers paid below minimum wage.
But the report’s authors, at Reynolds Porter Chamberlain (RPC), will now work on an additional governance report in time for the company’s AGM next year. Sports Direct has already announced separate report evaluating board performance.
RPC said Sports Direct founder and majority shareholder Mike Ashley accepted responsibility for management in the business as well as conceding he was not as aware as he should have been of issues within the company.
The report said: “Whilst the primary purpose of this report was to examine working practices and not corporate governance, clearly some of these findings do touch upon issues of corporate governance.
“It is also apparent that only so much can be achieved in the short space of time that has been available over the last three summer months — and it will take far longer to improve the general culture within the warehouse and some other parts of the business.
“For this reason, RPC has been requested by the board to lead a further comprehensive review that will use this report as a benchmark to identify what further action is required and to monitor steps already undertaken.
“The comprehensive review will be conducted over the course of the next year on a 360 degree basis that will include examining corporate governance. As part of this process, the board will be engaging with shareholders to get their views. The comprehensive review will then be presented to shareholders.”