Sports Direct (SPD) have received a requistioned resolution for its Annual General Meeting on the 7th September. The resolution which has been put forward by Unite Union and its supporters says: “That the board commissions an independent review of Sports Directs PLC’s human capital management strategy and report back to shareholders within six months.” with the supporting comment that “As over 100 shareholders in Sports Direct, we believe the company’s current approach to human capital management will compromise its long-term growth and shareholder value in the UK as well as in continental Europe.”
The Board of the company recommends shareholders vote against the resolution because it has already commissioned its legal advisors (RPC) to compile a Working Practices Report and a review is on-going. In addition they have opened a constructive dialogue with the Unite Union. The Board therefore considers it to be an “unnecessary distraction”.
Comment: Shareholders in companies should rightly be concerned if the activities of a company bring it into public disrepute in any way, and certainly the negative recent publicity about the working practices at Sports Direct are surely that. If the company is already meeting the obligation that would be imposed by the resolution, and intends to publish the results of an independent review, then there is no obvious reason why the company should object to the resolution. The resolution does appear to have some merit. However ShareSoc will not be giving a specific recommendation on this matter because we believe that shareholders should make their own minds up on such issues. But it is important that you vote on that and the other resolutions at the AGM.