Mike Ashley faces showdown over re-election as Frasers chief


Mike Ashley faces another showdown with investors at Frasers Group’s annual meeting on Wednesday after one advisory group said shareholders should block his re-election as chief executive and another advised them to abstain.

In a report to clients, Pensions and Investment Research Consultants (Pirc) said shareholders of the group, which owns Sports Direct, House of Fraser and Flannels, should rebel against Ashley as reports that workers at Sports Direct had been asked to go in to stores while on furlough were “representative of a corporate culture that does not meet best practice standards with regard to the treatment of employees”.

It also said shareholders should vote against the re-election of the chair, David Daly, as it was not clear that Frasers had sought to improve the ethnic and cultural diversity of its board and had not set up a sustainability committee.

At the time of the last annual meeting in September 2019, Frasers had to admit it had no auditor after the incumbent, Grant Thornton, stepped down, and it faced a potentially large Belgian tax bill. RSM was hired as auditor the following month and Frasers settled the tax issue for a negligible sum.

The shareholder group ISS said it recognised that Frasers had “made significant efforts to address most of the previously identified material failures of governance, stewardship and risk oversight”.

However, ISS said concerns remained about working conditions in the group’s Shirebrook warehouse as well as potential payments to Ashley’s daughter, future son-in-law and his mother. It said investors should abstain from voting for Ashley this year, having advised voting against his appointment in 2019, because the company had failed to respond adequately to previous protest votes.

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A further advisory group, Glass Lewis, said investors should back Ashley given improvements to Frasers board but said it remained “somewhat concerned by the continued reputational damage which Ashley’s presence on the board elicits”.

The potential rebellion comes after nearly a third of independent investors voted against Ashley continuing as chief executive last year over criticism of the company’s poor corporate governance.

At the time Ashley said he did not intend to carry out a review of governance standards, as he had once promised, and insisted he was not a “pantomime villain”.



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