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Sports Direct AGM

Ahead of the Sports Direct AGM tomorrow, Leon Kamhi, Head of Responsibility at Hermes Investment Management, assesses the company’s progress and highlights areas for improvement.

“We welcome a number of positive changes that have taken place since the 2016 AGM. This includes the appointment of Mike Ashley as CEO, Jon Kempster as a permanent CFO, two independent directors and a Workers’ Representative who will attend board meetings.

However, we are greatly concerned about the lack of one to one engagement the company has had with shareholders following the publication and implementation of the board’s Engagement Statement to investors, analysts and the media. It is our view that the absence of face to face engagement falls short of best practice and creates a multitude of missed opportunities to build positive and constructive relationships with interested third party minority investors.

Furthermore, we believe the 2017 AGM is an excellent opportunity for the board to update investors and other relevant stakeholders with progress made in implementing the Working Practices Report, which was released immediately before the 2016 AGM. Moreover, we would welcome further detail on the scope of and progress made in the Corporate Governance Review announced at last year’s AGM. We hope this will be forthcoming and build on the good work done in the initial report.

It is our view that it is now the appropriate time for Keith Hellawell, Chairman, and Simon Bentley, Senior Independent Director, to step down from their roles at Sports Direct. Therefore, consistent with the 2016 AGM, we have recommended votes against both of their positions. Further to this, we have also recommended votes against the auditor in light of fees for non-audit work remaining higher than fees for audit services.”

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