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Sports Direct chair gains Schroders backing

By Mark Kleinman, City Editor
The asset management giant run by the chair of an influential trade body has placed itself on collision course with rivals by backing the re-election of Sports Direct's chairman.
Sky News has learnt that Schroders voted in favour of Keith Hellawell at Wednesday's annual general meeting of the sporting goods retailer, which has faced years of controversy over corporate governance standards and the treatment of workers.
The decision by Schroders' fund managers is intriguing because its chief executive, Peter Harrison, also chairs the Investment Association - the lobbying group whose board includes several vocal critics of Sports Direct.Mr Hellawell narrowly survived this week's vote, winning the backing of 53% of the retailer's independent shareholders.Mike Ashley, Sports Direct's founder and chief executive, holds a controlling stake in the company, while Schroders owns roughly 15% of the shares not held by Mr Ashley.
Sports Direct chair gains Schroders backing

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Sports Direct has proved to be a profitable investment for Schroders
One rival fund manager described Schroders' support for Mr Hellawell as "poor", given widespread condemnation of the company from individual asset managers and the Investor Forum, a body set up to improve engagement between institutional shareholders and companies.Jessica Ground, a top Schroders fund manager, sits on the Investor Forum's board.People close to Schroders defended its support for Mr Hellawell, saying that he had helped drive a series of improvements to Sports Direct's board, governance and management.The retailer has proved to be a profitable investment for Schroders, which backed its initial public offering a decade ago.
It subsequently sold its shareholding in Sports Direct before buying back into the company below its flotation price since its AGM last year.
Investors including Hermes Investment Management and Royal London Asset Management have queued up this week to call for Mr Hellawell to step down.Influential investors such as Legal & General Investment Management and Standard Life Aberdeen also opposed his re-election.A trading update published this week to coincide with the AGM gave little detail about Sports Direct's performance, although Mr Ashley said: "We remain fully focused on our strategic goal of moving our core business towards the 'Selfridges' of sport in order to further strengthen our proposition and drive long-term profitability."We will continue to build on the positive progress that we have made over the last 12 months, which we outlined during a very constructive meeting with stakeholders in July."In a fiery confrontation with MPs last year, Mr Ashley defended Sports Direct's use of zero hours contracts and conditions at its warehouse in Shirebrook, Derbyshire.A Schroders spokeswoman confirmed that it had voted in support of Mr Hellawell.
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