The best reason – perhaps the only reason – for a Sports Direct shareholder to vote in favour of Keith Hellawell continuing as chairman is that finding a replacement to serve as boardroom counterweight to Mike Ashley might be tricky. The gig is not one to excite the usual club of non-executive directors.
But that’s a flimsy justification that no serious outside investor should entertain. Chairmen should be judged on their records and the list of complaints against Hellawell is long. There was a furious row over bonuses a couple of years ago when the board had to have four attempts to push through a scheme for Ashley.
Then there was Hellawell’s ineffectual appearance in front of the Scottish affairs select committee; MPs were astonished by his lack of knowledge about the collapse of a subsidiary. Or try Hellawell’s baffling tolerance for Sports Direct being run without a permanent finance director for the past two and a half years; Matt Pearson has been “acting” chief financial officer since June last year.
This year’s kerfuffle put the others in the shade, of course: the HMRC investigation that followed this newspaper’s investigation into working practices at the company’s Shirebrook distribution warehouse. Ashley, as well as admitting to parliament that Sports Direct had broken the law by paying some workers less than the minimum wage, conceded that the company “probably” outgrew his ability to manage it “a long time ago.” Shouldn’t a responsible chairman have noticed?
Outside shareholders would also expect an effective chairman to have told them more about the odd arrangement whereby Sports Direct pays a company owned by Ashley’s brother to deliver online orders outside the UK. Again, that disclosure came via the press.
Add it all up and this year’s rebellion against Hellawell’s stewardship is likely to be heavier than usual. Hermes, Legal & General, Aberdeen Asset Management and Royal London are all thought to be the “oppose” camp. New rules mean Ashley cannot vote his 55% stake so it is possible that Hellawell’s re-election could be defeated on Wednesday.
If so, Sports Direct and Hellawell will have two options. The first is to say “up yours” and call a second poll, in which Ashley would be allowed to vote, and force through the appointment anyway. The second is to conclude that the game is up, and that a new chairman is overdue.
Former policeman Hellawell is not a chap noted for taking a step backwards but even he should be able to see where Sports Direct’s own interest lies. The shares have plunged 60% since last summer, shareholders aren’t getting a dividend and the fabled bonus scheme isn’t even paying out for full-time staff. Bloody-mindedness isn’t working. It’s time to go.
Another JP Morgan bloke for Barclays’ executive committee
Chief executive Jes Staley’s latest senior recruit to Barclays is Tim Throsby, who will head the corporate and investment bank. He comes from JP Morgan. They usually do.
Staley has made five appointments to his executive committee since becoming boss last year. Two have been internal promotions and three have been hires from JP Morgan, his old shop. Another former Morganite, finance director Tushar Morzaria, was already in place when Staley arrived. So the ex-JPM tally now reads five out of nine members of the executive committee, including Staley himself. It’s been a quiet takeover – though not necessarily one that will upset shareholders.
But the lack of diversity is striking in another regard: where once there were two women on Barclays’ executive committee, now there are none. “We want to see more women represented in senior roles,” runs the bank’s standard blurb. Easy to say; easier in practice, it seems, to get a bloke from JP Morgan.
Corporate types take note: May might have meant it
Still on boardroom governance, half the corporate world seems to have convinced itself that Theresa May didn’t really mean it when she made that fierce speech in her leadership campaign about “doing something radical,” like putting employees and consumers on boards.
Corporate lobbyists have spent subsequent weeks suggesting ways in which the prime minister could water down her ideas with minimum political fuss. Instead of elected representatives on boards, how about allocating the role to a regular non-executive director?, runs one feeble compromise.
What if May meant every word? “We’ll be bringing out some proposals later in the year,” said May when asked about corporate taxes and responsibility at the G20 summit. That commits her to nothing, but corporate types should take note: there’s no hint of back-sliding yet.
