Sports Direct has said Keith Hellawell will continue as chairman despite having offered to quit, as the firm also warned that annual earnings will plummet following a turbulent year.
The company said that, despite several investors calling for Mr Hellawell to go, the Sports Direct board, including majority shareholder Mike Ashley, have asked him to stay in his role.
The former West Yorkshire Police chief constable has faced a barrage of criticism from shareholder groups as the firm has come under scrutiny over claims of “Victorian” working practices and poor corporate governance.
“Dr Hellawell had offered to step down over the weekend in the light of the shortcomings highlighted in the report, but he will stay in his role in order to assist with making further improvements,” Sports Direct said in a statement.
To compound matters, the retailer said earnings are expected to come in at £300 million for the year, down from last year's £381.4 million.
Mr Ashley was bracing himself for a showdown with shareholders and unions at the company's annual general meeting (AGM) on Wednesday as he threw open the retailer's factory doors to the public as part of an “open day”.
However, the billionaire, who also owns Newcastle United FC, said that, despite speculation, he has no intention to take the company private.
On Tuesday, Sports Direct announced a raft of measures aimed at addressing concerns over working practices at its warehouse in Shirebrook, Derbyshire.
And Mr Ashley said in a video statement that he will put a workers' representative on its board.
Ashley was bracing himself for a showdown with shareholders and unions at the company's annual general meeting (AGM) on Wednesday as he threw open the retailer's factory doors to the public as part of an “open day”.
The firm said it will offer casual retail staff guaranteed hours instead of zero-hours contracts and ensure all warehouse staff are paid above National Minimum Wage following a review.
But investors are calling for an overhaul of its board of directors, a shake-up of corporate governance and an independent review into working conditions at its factories.
Royal London Asset Management, which owns a 0.18% stake in Sports Direct, said that while the reforms are an improvement, they set “the bar quite low”, adding that Mr Hellawell's position was “untenable”.
Other heavyweight investors, such as Legal & General and Hermes Investment Management, are also expected to vote against Hellawell's re-election on Wednesday.
Another shareholder advisory group, Pensions and Investment Research Consultants (Pirc), has advised investors to vote against the re-election of Mr Hellawell and Mr Ashley, who is executive deputy chairman.
The Investor Forum, consisting of influential investors managing assets worth more than £14 trillion, has urged Sports Direct to “undertake a wide-reaching independent review of the entire governance practices at the company”.
Unite assistant general secretary Steve Turner said that, while the report represents progress, the union still wants the company to go further.
PA
