Sports Direct's policeman has built quite a rap sheet

Outlook

Institutional investors haven’t always been terribly receptive to the ideas of the trade union movement. On the subject of Sports Direct, it might be in their interests to find some common ground.

The unions’ share-ownership arm wants chairman Keith Hellawell voted out. That’s understandable, you might think, given the company’s longstanding, and lamentable, use of zero-hours contracts for a large part of its workforce and its cavalier behaviour when part of subsidiary USC went under leading to 200 workers being laid off with just 15 minutes’ notice.

But the problems with Mr Hellawell go well beyond this.

Sports Direct has been repeatedly involved in governance controversies, ranging from its eccentric moves in the stock market taking minority stakes in other businesses, to its attempts to hand bucketloads of free shares to the founder, deputy chairman and controlling investor Mike Ashley. When it comes to governance Mr Hellawell, a former policeman, is acquiring quite a rap sheet.

At its core, Sports Direct is a superb business that serves its customers well. It would have little difficulty both treating its employees better and steering clear of the controversies it keeps wading into.

A stronger, more effective chairman might help there to the benefit of all, including Mr Ashley. Rule changes mean minority investors have the power to throw out the non-executive directors of companies with powerful controlling shareholders. They should make use of it.