JD Sports and The Hut Group feel impact of corporate governance concerns
Being a listed business has its advantages, but it also carries with it closer scrutiny and a need to respond to the interests of shareholders. Both long-time listed company JD Sports Fashion and newcomer The Hut Group have felt this keenly in recent days.
JD has just endured a shareholder revolt over executive pay that saw Andrew Leslie, chair of the remuneration committee at the firm being forced to step down after 11 years on the board.
Shareholders had been unhappy about large bonuses paid to company boss Peter Cowgill, despite the company having accepted £100 million+ government subsidies to help it through the pandemic period.
The revolt came after the company had earlier caved in to pressure and suggested it would split Cowgill’s executive chairman CEO roles with a new CEO to be recruited. It also seemed to be rethinking its earlier refusal to hand back any of the government cash, saying it had yet to decided what to do.
Meanwhile, on Friday, The Hut Group also looked to be responding to criticism over its corporate governance.
The beauty and e-tail giant only listed its shares this year but has been the subject of negative press over founder Matthew Moulding’s combined executive chairman and CEO role. It has also been suggested that the company set-up gives non-executive directors and shareholders little influence over what happens at the business.
While THG hasn’t gone as far as to separate the two top roles, it has formed a new standalone Risk Committee. This should “ensure the skillsets and experience of the company’s non-executive directors are best utilised across its various board committees,” it said.
The new committee will monitor risks to the business and advise the board on the group’s overall risk appetite, tolerance and strategy. It will comprise independent non-execs Zillah Byng-Thorne, Damian Sanders and Dominic Murphy.
The company has also made changes to its Remuneration Committee and has named four independent special advisors. They’ll support it in areas such as tax, risk and governance.
Moulding said the moves “highlight the board’s recognition of the importance of strong corporate governance and reinforce its continued commitment to ensuring that a robust corporate governance framework is in place which underpins the long-term prospects of the group”.
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