Here is a tip for Sports Direct that could save Mike Ashley a few bob. Rather than bringing in highly-paid consultants to evaluate the company’s board, just ask your shareholders. City institutions would swiftly tell Ashley that Sports Direct needs a credible chairman and a permanent finance director.

The fact that Sports Direct chose to publicly announce that it will conduct an “external evaluation” of its board suggests one problem is already clear. Keith Hellawell is not performing as chairman.

The UK corporate governance code stipulates that FTSE companies should appoint a third party to review their board at least every three years, but it is unusual for a company to announce the evaluation publicly as Sports Direct did.

The company should not need a third party to identify the strengths and weaknesses of its board. The chairman should already know them and the company’s shareholders should be confident that he does.

Investors have had concerns about Hellawell’s suitability since he was appointed in November 2009. The former policeman made his name as the chief constable of West Yorkshire and the government’s drugs tsar, but had limited experience of the private sector.

At first, such concerns were put to one side because Sport Direct’s share price was rising and the retailer had previously been without a permanent chairman for more than two years after David Richardson, an experienced executive, quit following clashes with the rest of the board.

Frustration has grown after criticism of Sport Direct’s working practices, a chastening appearance by Hellawell in front of a parliamentary committee last year and Ashley buying shares in other retailers such as Tesco and Debenhams. Perhaps most importantly, shares in Sports Direct are now worth less than a third of the 922p peak hit in 2014.

The lack of a permanent finance director is a farce and another damning indictment of Hellawell. Bob Mellors stepped down in December 2013 for health reasons, but Sports Direct is yet to appoint a permanent replacement, with Matt Pearson filling the role on an interim basis.

The company held its last board evaluation in 2014, but did not publish the findings or make notable changes as a result. That cannot be the case this time. It must revitalise its board. It should replace Hellawell and appoint a permanent finance director.

It needs to make changes to become a credible investment proposition in the eyes of City institutions, but also to protect the thousands of employees who work for the company. Ashley has pledged to publish the results of an investigation into Sport Direct’s working practices and to make improvements. A strong chairman would ensure this happened.

Asda takes sensible route in face of ongoing sales downturn

The sharp downturn in Asda’s sales shows how quickly momentum can change in the supermarket industry.

Less than three years ago, Asda was the first of the “big four” supermarket chains to react to the rise of the discounters Aldi and Lidl, revealing plans to cut prices by £1bn over the next few years. It was the best-performing major supermarket chain in the country ahead of Tesco, Sainsbury’s and Morrisons.

Now it has reported a 7.5% drop in like-for-like sales for the last three months, its worst-ever quarterly performance and the eighth consecutive drop in quarterly sales.

Since Asda made its move in 2013, Tesco, Sainbury’s and Morrisons have all responded, while Aldi and Lidl continue to expand rapidly, the Co-op has revitalised its stores, and Waitrose and Marks & Spencer remain strong upmarket competitors.

Asda’s sales have fallen victim to the desire of its US parent company, Walmart, to protect profits in the UK. This has made it vulnerable to aggressive moves from its rivals.

The ousting of Asda’s boss Andy Clarke earlier this year suggested that Walmart wanted improvements, but new boy Sean Clarke is unlikely to make dramatic change and launch a new price war. Instead, the strategy will be “focused on improving the retail basics”, according to Doug McMillon, Walmart’s chief executive. This basically means Asda will focus on keeping its shelves full and costs under control.

This is not the drastic response you might expect to a 7.5% fall in sales, but it is sensible. The leading grocery retailers need to move away from their obsession with market share and like-for-like sales, which excludes newly opened or closed stores. Now that the “big four” are more focused on closing stores than opening them, it is inevitable they will lose market share as the discounters open new outlets across the country and customers buy more on the internet.

It is important that the supermarkets remain competitive on price and quality, but a race to the bottom with more steep price cuts would be ruinous and make stores unviable.

The “big four” are already struggling to make their largest stores profitable. It will take years to repair the damage done by opening too many stores, and cutting prices will not solve the underlying problems. Asda and its rivals have a long battle ahead, and there is no easy answer.