The Magpie Group
14th September 2018

A shareholder's account of the 2018 Sports Direct AGM

I don’t spend a lot of time at AGMs; in fact, the Sports Direct version held in a partly finished floor space at Academy House in Central London was my first. I could be wrong, but I’m fairly certain they usually last more than 15 minutes for large-scale businesses such as this.

However, after the cursory/derisory amount of time allocated to the meeting, and Mike Ashley’s appearance after saying he was too busy (he lied, again), the most striking aspect of the non-event was the complete absence of a Q&A session involving shareholders in the audience (not to mention the sprinkling of Mags in attendance) questioning the board of directors.

The ‘meeting’ was chaired by Keith Hellawell, who has previously relied on Ashley’s intervention as Chief Executive and majority shareholder (he owns 61% of the company) to retain his position as Chairman following shareholder unrest. After Hellawell confirmed his and non-executive director Simon Bentley’s resignations, he covered some admin points before giving some guidance on the polling card, which contained the 18 Resolutions that were to be voted upon. Questions were invited from shareholders/proxies, but specifically regarding the 18 Resolutions only. When there were no takers, the board hastily relocated to a nearby meeting room, one making a glib comment about getting to the pub early.

With people unclear whether the meeting was over or briefly adjourned, the room started to empty. There was no ‘any other business’ or opportunity for an open forum Q&A session. As far as I could see, there wasn’t even a printed agenda, only a few rows of plastic seats on a bare concrete floor. I asked both a reporter and a shareholder whether I was wrong to expect a Q&A, and both confirmed that it is normal practice to include this in an AGM.

While Q&A sessions are not a compulsory element of any AGM, they are seen as an ideal opportunity to engage with shareholders and let them have their say. Indeed the ICSA (Institute of Chartered Secretaries and Administrators), who ‘champion good governance practices’, identify the Q&A as one of the main reasons shareholders attend an AGM. It is also seen as an opportunity for good ‘PR’ in front of the media.

Given the current climate of shareholder unrest, including advisory groups advocating voting against Ashley and Hellawell, this should have given the board some much-needed face time with their investors. It raises further questions about the corporate governance of Sports Direct, which is at the top of the list of current shareholder concerns, along with a falling share price, the reported £5million payment to his daughter’s boyfriend, and the House of Fraser buyout.

There were no presentations, speeches or any sort of board-shareholder engagement that (according to my research) are common practice in corporate AGMs; Ashley remained silent, with a decidedly uncomfortable look on his face. On reflection, the whole meeting came across as scripted and stage-managed, an approach with which all NUFC fans are all too familiar.

Is this just another example of ‘typical Ashley’? He is either gambling on shareholder loyalty, as he does with ours, or it is another display of outright arrogance and contempt; in my opinion, it is a mixture of both. To quote a recent headline from the national press: “The investors aren’t happy. But Mike Ashley doesn’t have to care."

Andy Ashwell (@El_Tibur0n on Twitter)

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