Sports Direct bids to revive battered reputation by putting workers' representative on board

Mike Ashley, founder and majority shareholder of sportwear retailer Sports Direct, has been criticised over weak corporate governance and poor conditions at its main Shirebrook warehouse in DerbyshireDarren Staples/ Reuters

Sports Direct said it has kicked off the process to appoint a shop floor representative to its board, as it faces intense political and shareholder pressure over working conditions.

The company, founded by chief executive Mike Ashley, said it will hold an election for a workers' representative among its 23,000 directly employed staff, who will then attend board meetings to "champion the interests of all staff".

It estimates the first staff representative should be in place to attend board meeting by the spring.

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In a letter to staff Ashly wrote: "I have always believed Sports Direct to be a business that was built by the great people who work here. I therefore believe it is important that your voice is heard at the highest level in order to continue to make a positive difference.

"I look forward with immense pride to sitting alongside the UK's first elected Workers' Representative at future board meetings of Sports Direct International."

The group said the representative, who will sit on the board for a 12-month period, will not be made a director because it "believes this would potentially constrain their ability to fulfil the role".

The move comes after a series of running battles the company has waged with investors and MPs over corporate governance and conditions at its main Shirebrook warehouse in Derbyshire.

Last year MPs on the business select committee accused Sports Direct of employing "Victorian workhouse techniques".

Family business

This came after a Guardian newspaper investigation in 2015 at the Shirebrook warehouse that found staff were harangued if they spent too long in the toilet.

It also found that employees were paid below the national minimum wage, staff were searched and temporary staff were promised permanent contracts in exchange for sexual favours.

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Ashley has since pledged to make £1m of payments to workers who fell under the minimum wage because of searches, and put a process in place for reporting of sexual harassment.

A number of investor powerful investor groups, such as The Investor Forum and Legal & General Investment Management, have criticised Ashley for employing members of his family in key roles and for his close links with other board members, which they say compromises independent decision-making.

Ashley's brother is involved in distributing products sold by Sports Direct, while his daughter's 26-year boyfriend was put in charge of the group's vast property portfolio.

Last autumn Theresa May mooted the idea of employee representation as part of her Conservative Party leadership campaign, which focused on tackling corporate excess. However, shortly after becoming Prime Minister, she ruled out forcing companies to appoint workers saying she was in favour of a less interventionist approach.

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