Sports Direct and its shareholders are struggling to agree on a heavyweight individual to conduct an independent review of the business before a second vote to re-elect its chairman that must take place by early January.
At the retailer’s annual general meeting on 7 September, a majority of independent shareholders voted to oust Keith Hellawell as chairman. At a tense meeting following the AGM, shareholders demanded an independent review of how the company is run as a minimum requirement for working with Hellawell.
The Investor Forum, which represented big shareholders in talks with Sports Direct, said at the time the review could be carried out by an experienced person or a law firm. Two weeks after the AGM, Sports Direct agreed to independent scrutiny of its treatment of employees and corporate governance.
Sports Direct had wanted the law firm Reynolds Porter Chamberlain (RPC) to carry out the review but shareholders said it was not independent because it had worked for the company and its founder, Mike Ashley. But other firms could also have perceived conflicts of interest if they have worked for big investors or they might seek work from them in future.
An investor familiar with the talks said for that reason both sides were now looking for a credible individual rather than a professional services firm to conduct the review. But the number of qualified people is limited and potential candidates are likely to be busy or wary of putting their reputation on the line.
