Save the date - inspect your toilets 🚽

While being a trade union safety rep is definitely not a glamorous role, most people realise it is not a joke if you have to work outside a properly equipped office and/or suffer from many disabilities and don't have ready access to a toilet or are not allowed sufficient time to go to the loo! (thinking Sports Direct warehouses). 

At my work UNISON colleagues and myself have signed up to this campaign. We have contacted our employer health & safety team and other activists to try and carry out inspections during this TUC campaign.

I would encourage other union safety reps to do the same. 

Do you have good enough toilets and toilet breaks?

All workers need toilet breaks – it's a basic right. But many are denied this due to insufficient breaks and facilities.  To highlight the issue, we're inviting safety reps to carry out a workplace toilet inspection in the week of 17 –  23 March. We’ll be lifting the lid on what needs improving, and how unions are best placed to understand and advocate for safer workplaces.   Sign up below to take part, and we’ll send you all the info you need, including a checklist. If you carry out an inspection and tell us about it, you’ll receive a TUC Education credentials that recognises what you've done. Read more about TUC credentials. We are expecting hundreds of you to collectively take part in this inspections week of action - get involved!

SIGN UP

Being on Mike Ashley's Naughty List

Now the season of good will is well and truly over, I can confirm that I did not receive a Christmas card from Sports Direct Mike Ashley.

I am of course - gutted.

Hat tip Daily Telegraph

"The rant before Christmas: five people on Mike Ashley’s naughty list"

Sports Direct’s first-half results beat expectations on Monday, sending its shares soaring almost 30pc. Beyond the numbers, however, the update was arguably more interesting for the potshots chief executive Mike Ashley took at his rivals. So who will not be receiving a Christmas card from the Ashley household this year?......

In September, John Gray, the Labour councillor and representative of the Pirc-supported Local Authority Pension Fund Forum (LAPFF), suggested at Sports Direct’s AGM that the company’s board did not have the appropriate skills to run the group. 

Ashley said the comments were “misinformed and hysterical”....... 

(The others on the Mike Ashley naughty step included Jeremy Corbyn, David Adams, Rachel Reeves MP, PIRC and Goals Soccer Centres)

Check out previous posts :-

https://www.johnslabourblog.org/2019/09/pension-fund-anger-at-sports-directs.html

https://www.johnslabourblog.org/2019/11/mike-ashley-blocks-labour-councillor.html

https://www.johnslabourblog.org/2019/12/lapff-engagement-with-ryanair-sports.html  

LAPFF Conference: Engagement with Ryanair & Sports Direct

“LAPFF’s deputy chair John Gray presents the successful outcome of engagement with Ryanair which is showing signs of progress on labour rights and board independence plus the challenges of engaging with SportsDirect”.

Hat tip Local Authority Pension Fund Forum Conference. 

"Mike Ashley blocks Labour councillor from Sports Direct board meetings after Corbyn row"

Hat tip Laura Onita Telegraph

"Sports Direct tycoon Mike Ashley has blocked a Labour councillor from joining the retailer’s board meetings after a spat with Jeremy Corbyn.

The billionaire wrote to John Gray, who is also the vice-chair of the Local Authority Pension Fund Forum (LAPFF), to say that he could no longer attend Sports Direct’s board meeting in December.

It comes after the Labour leader accused Mr Ashley of taking advantage of the UK’s “corrupt system” in a blistering attack on capitalism on Thursday.

Corbyn had labelled Mr Ashley a "bad boss", accused him of not paying staff properly and said he had an exploited workforce.

Sports Direct hit back in the letter to Mr Gray on Friday, saying Mr Corbyn has a "complete lack of understanding" and arguing that many successful retailers had worked their way up from nothing.

The letter, from the retailer’s legal boss Tom Piper, said: “It was disappointing to read in the press yesterday the personal and unfounded attacks against Mr Ashley made by Jeremy Corbyn.”

“In line with Mr Corbyn’s complete lack of understanding of the state of UK retail, he should be reminded that the sector is a huge employer for the nation, and that it is one of the few sectors where there is no glass ceiling.

“Indeed as an example many senior management members of staff at Sports Direct, past and present, started on the shop floor. Thus his views on Mike Ashley and Sports Direct contradict his socialist utopia.”

Mr Ashley, who is Sports Direct’s founder and chief executive, said he would welcome outsiders at board meetings following criticism over working conditions and how the company is run at its annual gathering with shareholders in September.

Mr Gray, who was at the meeting and is also a Labour councillor for the London borough of Newham, wrote to Mr Ashley nine days later to say he would like to take him up on his offer and an agreement was reached.

Responding to Sport's Direct's U-turn, Mr Gray said: "I'm really disappointed. We have made critical but constructive comments about the governance arrangement of Sports Direct over the years, which we believe is unsatisfactory; why the organisation got in trouble over awful labour rights, is it symptom of wider problem; the massive £600m bill; the accountants who walked off.

"I've had engagement with a number of large companies over the years. I happen to be a Labour concillor but in my role as vice-chair, I represent the pension funds. I have never been challenged in that capacity.

"I get it, there is an election and it's a crazy world but our [LAPFF] chair is an independent councillor, so if there's a problem with me, which I don't accept, then what about he asks our chairman to attend?"

But on Friday Sports Direct’s Mr Piper said: “The board cannot, as a matter of good governance, allow an observer to attend board meetings where there is such a clear conflict of interest between the two parties.”

LAPFF represents 80 local authority pension funds with assets of £250bn. Collectively, the organisation represents the retirement plans for 4 million UK citizens.

Sports Direct was criticised by MPs in 2016 for “Victorian” working conditions after an investigation uncovered workers at its Shirebrook warehouse being paid below minimum wage and penalised for taking breaks.

Mr Corbyn promised on Thursday to go after some of Britain’s richest people in a bid to position the Labour Party as being on the side of the “many not the few”.

It came as the Labour leadership appeared to endorse a call to effectively outlaw billionaires.

As well as Mr Ashley, the Labour leader also singled out Crispin Odey, who runs one of the country’s largest hedge funds; media mogul Rupert Murdoch; the Duke of Westminster, a major land owner; and Sir Jim Ratcliffe, boss of energy firm Ineos.

Sir Jim, the Duke and Mr Ashley contribute an estimated £167m to the Exchequer each year.

Local Authority Pension Fund Forum (LAPFF) Executive Induction

Today I went on an induction to the LAPFF Executive following my election as Joint Vice Chair.

I used to be on the LAPFF Executive in 2013/2014 and it is good to be back.

LAPFF represents 80 UK Council pension funds and 6 Collective investment pools with asserts worth some £250 billion.

Some 4 million people have paid into UK Council pension funds.

Last week I represented LAPFF at the Sports Direct AGM and on Thursday I will be in Dublin for the Ryan Air AGM. 

Pension fund anger at Sports Direct's Mike Ashley: 'There’s a problem here'

This morning I went to the Sports Direct Annual General Meeting, during which I had at times a rather robust conversation with its founder, majority shareholder and Chief Executive Officer, Mike Ashley. The media were banned from the meeting.

Hat tip article Oscar Williams-Grut. Senior City Correspondent, Yahoo Finance UK

"Sports Direct (SPD.L) received an angry reception from major shareholders on Wednesday at a tightly controlled meeting with investors.

The discount sports retailer faced a shareholder rebellion at its annual general meeting with investors. Press were barred despite intense public interest in the company.

At the AGM, 9% of voting shareholders rejected Mike Ashley’s reappointment as CEO and 17% of independent shareholders who voted tried to stop David Brayshaw being reappointed as a director. Other directors faced smaller rebellions.

Founder Ashley owns over 60% of shares in the business, meaning he was always set to win all the AGM motions. However, independent shareholders expressed their anger at the way the company is being run at the voting box and outside the AGM.

“I’m hoping that everybody wakes up, smells the coffee, realises there’s a problem and fix it,” John Gray, vice-chair of the Local Authority Pension Fund Forum, told the press.

Sports Direct has in recent months lost its auditor, unveiled a surprise £600m ($742m) tax bill, and warned that its controversial acquisition of bust department store House of Fraser is hurting the wider business. It is currently struggling to appoint a replacement auditor.

‘Insufficient challenge’
“Without being personal about it, there is insufficient challenge to Mike Ashley on a board level,” Gray told the press outside the AGM in London’s Soho.

“When you’re dealing with a majority shareholder, somebody like Mike Ashley — who I’ve never met before — you need to have a robust team of directors, confident in what they do with extensive experience in order to stand up to him.”

Gray, who is also a councillor in the London borough of Newham, said he represented 80 local authority pension funds with assets of £250bn ($390.1bn). Collectively, his organisation represents the retirement plans for 4 million UK citizens.

“It’s really, really important that when we have issues with companies that we have to invest in because they’re in the index, that they meet with us and address our concerns properly,” Gray said.

“I don’t want to have another robust conversation in 12 months time but we will if necessary.”

Gray said he voted against all motions at the AGM, which attracted less than 20 attendees and ran for about an hour. Ahead of the meeting, advisory group Institutional Shareholder Services (ISS) counselled investors to vote against Ashley’s reappointment as CEO.

“This could be a test case for good governance in the UK,” Gray said. “The issue over the way workers are treated at Sports Direct should have been a signal to everybody: there’s a problem here.”

Sports Direct was criticised by MPs in 2016 for “appalling working conditions and practices,” after an investigation uncovered workers at its Shirebrook warehouse being paid below minimum wage and penalised for taking breaks, as well as health and safety breaches.

“It’s not just about workers dignity and their rights — it follows through with the governance in the company,” Gray said, “and that’s why you’ve got a £600m unexpected tax bill from the Belgian government, that’s why the auditors have walked away from Sports Direct, that’s why — and there may be other reasons as well — they can’t find an auditor.”

Sports Direct was due to appoint an auditor at today’s AGM. The company told investors it was “in the middle of a process” but did not comment further.

If Sports Direct is unable to appoint an auditor in the next seven days, it will have to ask business secretary Andrea Leadsom to step in and appoint one on its behalf.

‘Panto villain’

Besides questions over governance and auditing, Sports Direct’s board also faced criticism for their failure to pay a dividend.

“The share price is low because who’s going to buy a share when you’re not getting a return?” Laurence Corbet, a Sports Direct shareholder for over a decade, told the press outside the meeting.

Corbet said he too voted against all the resolutions but said he would support management if they introduced a dividend. He called Mike Ashley the “enfant terrible of retail, but he gets things done.”

Ashley, who owns over 60% of Sports Direct, complained at the AGM the media was “painting me as a panto villain”.

A spokesperson for Sports Direct said after the AGM: “We remain totally focused on delivering our elevated proposition, which following the AGM continues to be supported by the investor community.

"We are already seeing some exciting milestones with the acquisition of Jack Wills, the opening of the new Flannels flagship store in London, and plans for Fraser are now in motion.

"We are building a young and dynamic executive team to assist in this transition but making sure we retain the core values in the existing business that have allowed the business to prosper over the years.”

The spokesperson gave no update on Sports Direct’s auditing situation.

Wednesday’s AGM also saw a small protest from fans of Newcastle United, the football club owned by Ashley.

Voting NO at Sports Direct AGM 5.1.17

Thanks to my 2nd favourite trade union (sorry GMB but I used to be a T&G rep in Scotland and my Dad was an ETU assistant branch secretary) I have a very small shareholder in Sports Direct PLC (one share).

This morning I voted on line against Dr Keith Hellawell being re-elected as a Director of Sports Direct at the meeting on 5.1.17.

The unions are not briefing anyone with regard to this meeting following the successful motion at the AGM in September.

Lets hope the Company will learn from its mistakes and carry out a proper review of its governance and stop treating its staff so badly.

I have my doubts.

I also note that Sports Direct shares are half the price they were 12 months ago. 

#LAPFF16 Annual Conference - Thursday

This is the day 2 report of last weeks Local Authorities Pension Funds Forum (LAPFF) annual conference by John Walker, who is a UNISON member and sits on the Cambridgeshire Pension Fund Committee as a Member nominated representative. See Wednesday report here

Thursday morning commenced with a presentation on Share Buy Backs. The City Editor of the Evening Standard gave a broad sweep approach pointing out that Company’s often bought back their own shares for tactical reasons but said that this policy often benefited the Company and its Directors and not necessarily the Shareholders.

This was followed by a presentation by an American author Robert Tietelman who had written a book entitled ‘Bloodsport’ about Company Mergers, Acquisitions and Takeovers in the USA that had influenced the UK markets. He concluded that mergers and acquisitions meant growth for the Company involved whereas share buy backs did not.

This was followed by an interesting presentation entitled Human Capital Management by the Director of Sustainability of SSE one of the bigger Energy Companies. She outlined a whole raft of statistics showing how SSE was evaluating the performance and worth of its workforce under the banner of ‘A Responsible Employer’. As it progressed and developed the Company paid detailed attention to promoting redevelopment and retraining rather than redundancy. There was also a presentation by the Pensions and Life Savings Association focusing on the importance of Human Capital.

The final morning session was on Directors Pay – the Challenge of Quantum. The speaker was a Director of the High Pay Centre who had been giving evidence to a Commons Select Committee charged with the preparation of a Green Paper for Parliamentary debate early in the New Year. His statics proved that top pay fir Directors and more particularly Chief Executive Officers had grown out of all proportion in the past decade – and continued to grow. He sought (perhaps unsuccessfully) to justify this trend but pointed to checks and balances including the recent legal obligation of workers on Boards. He questioned whether a CEO should justify high pay on the basis of having the ‘final decision’ and whether that was justifiable or desirable. Predictably two of the questions from the floor mentioned PRP and professional footballers’ wages.

The afternoon session began with a session entitled ‘Are the Activists Winning?’ Owen Walker from the Financial Times had produced a book entitled ‘Barbarians in the Boardroom’ which related to shareholder activists that had mounted a challenge to targeting and removing some directors and executives from some of the world’s largest Companies and taken their places. Some Companies subsequently suffer asset stripping.

Next came thought provoking presentation entitled Redefining the Responsibilities of the Corporation. The speaker set out in great detail the responsibilities and duties of Company Directors whose main aim should be to create value on behalf of the Company and its Shareholders. He touched on the vexed question of executive pay and related to the inequality of the north/south divide quoting the outgoing HM Inspector of Schools about those ‘north of the Wash’ having less advantageous education. It was a semi-interactive session with audience participation encouraged.

The final session of the day entitled Shareholder Resolutions – the Last Chance Saloon brought together three unlikely bedfellows in the shape of LAPFF Chairman Kieran Quinn, a Climate Change expert and a representative of UNITE – the Union. The UNITE presentation centered on the recent success of Shareholders led by the Unions (including UNISON) who had forced major changes in the working practises, pay rates and Health and Safety implementation for staff of Sports Direct. Kieran Quinn related the success of the well documented campaign against National Express in the USA and the third speaker gave details of the pressure on Exxon Mobil and other American oil/gas Companies.

Victory for decency at work - Sports Direct will hold an independant review into its employment practices.

In what is also a victory for effective pension stewardship, "workhouse employer" Sports Direct agreed to hold an independent review into its awful working practices and governance.

See TUC press release below

"Trade Union Share Owners welcome Sports Direct announcement on independent review

20 September 2016

Trade Union Share Owners (TUSO) have welcomed the announcement today (Tuesday) by Sports Direct that there will be an independent review of the company’s working practices and corporate governance.

The announcement follows a resolution calling for an independent review that was tabled at the company’s AGM earlier this month by TUSO, and supported by a majority of independent shareholders.

TUSO Chair Janet Williamson said: “This is good news for Sports Direct workers, especially young workers who make up a large part of their staff but too often get a poor deal at work.

“The board should now consult both shareholders and trade unions in finalising the plans for the independent review. Trade unions representing workers at Sports Direct stand ready to work with the company to ensure a successful future that is fair for its staff.”

NOTES TO EDITORS:
- The Trade Union Share Owners (TUSO) is a group of investors representing the financial assets of the labour movement, including the TUC staff pension fund, the Unite staff pension fund, the UNISON staff pension fund, and the International Transport Workers’ Federation.
- All TUC press releases can be found at www.tuc.org.uk"

Hat tip cartoon Kipper Williams, the Guardian

"Sports Direct cannot be allowed to mark their own homework"

Check out the press release below from the TUC about rotten employer "Sports Direct" whose company AGM is tomorrow.

The BBC report here that Sports Direct are desperately trying to pretend that all is ok and they are going to change.

Such human right abuses will always occur when you have employers who refuse to recognise independent trade unions and don't have collective bargaining agreements.

Trade Union recognition is an internationally recognised fundamental legal human right. If any company refuses to recognise trade unions then they are clearly human rights abusers.

Good luck with motion 19 tomorrow at the AGM calling for an independent investigation into the employment practices of Sports Direct. I wish I was there.

"Commenting on a report into Sports Direct’s employment practices by its law firm published today (Tuesday), TUC General Secretary Frances O’Grady said:

“An apology is always a good start, but this is too little, too late. What we really need is an independent investigation, as called for by the trade union resolution at tomorrow’s Sports Direct AGM.

“A report written by a law firm which previously represented Mike Ashley and management simply won’t cut it. Sports Direct cannot be allowed to mark their own homework.

“Cases like this show why the government must act to end the abuse of zero-hours contracts, and get serious on enforcing employment rights.
“
This story is a testament to the tireless work of Unite the union, which has played a key role in revealing abuses at the company.

"I urge shareholders to support the Trade Union Share Owners’ resolution 19 for an independent investigation into employment practices.”

NOTES TO EDITORS: 
- The Trade Union Share Owners group, of which the TUC is a member, is calling on Sports Direct shareholders to support resolution 19 at the AGM, which commissions an independent review of Sports Direct International plc’s human capital management strategy.

 - The Trade Union Share Owners (TUSO) group is a group of investors representing the financial assets of the labour movement, including the TUC staff pension fund, the Unite staff pension fund, the UNISON staff pension fund, and the International Transport Workers’ Federation.

  - The resolution has been filed by investors including the TUC and UNISON staff pension funds, both members of TUSO, and the Borough of Islington Staff Pension Fund and Prospect general fund.

- All TUC press releases can be found at www.tuc.org.uk

- Follow the TUC on Twitter: @The_TUC and follow the TUC press team @tucnews

Sports Direct: Treating workers like dirt is bad for business (and investors)

I was pleased that UK Council leaders are supporting the resolution at the Sports Direct AGM next week for a review of its HR practices.

UNISON staff pension fund have backed this campaign via the TUC organised Trade Union Shareholders Organisation.

 

Both LGPS pension funds I am associated with have instructed their fund managers to vote in favour of motion 19.

 

If a company treats its workers like dirt there is a long term risk to investors. If you have workers collapsing at work since they are too scared to report sick if they are ill and female employees sexually exploited to keep their jobs then there is clearly a dysfunctional employer causing massive legal,  reputational (and moral) risks to any pension or insurance fund that seeks to invest in it.

 

If they do all this to their workforce then what else is going on? Fiddling taxes? Excessive payments to Executives? Faulty accounts? Corrupting public officials? Trashing the environment?

 

LAPFF press release. "Leading shareholder group, the Local Authority Pension Fund Forum (LAPFF), has backed a shareholder resolution at Sports Direct’s Annual General Meeting. The resolution calls for an independent review of Sports Direct International plc’s human capital management strategy and requests a report on the findings of this review to be released to shareholders within six months of the AGM.

 The UNITE union has filed the resolution after extended criticism of Sports Direct’s labour
practices. This criticism includes reports of severe health and safety violations and sexual
abuse at the Company’s Shirebrook facility in Derbyshire, as well as use of so-called ‘zero
hour contracts.’ The labour practice concerns have been coupled with a massive drop in share price over the last year and Sports Direct’s departure from the FTSE 100. Some commentators have alleged that the two issues are related.

According to LAPFF Chairman, Cllr Kieran Quinn, “LAPFF’s view is that responsible business practices by companies lead to sustainable returns for investors over the long-term. We are worried that this view is not shared by Sports Direct.”

In support of the resolution, LAPFF has produced a proxy advisory briefing which has been
distributed to its Member Funds. This briefing expresses concern that although Executive
Chairman and controlling shareholder, Mike Ashley, has committed to conducting a workplace review himself, this review would not be independent. LAPFF is further concerned that Sports Direct’s promise to have its lawyers, RPC, issue a summary of Mr Ashley’s report would just rubber stamp the Company’s version of affairs.

A Trade Union Share Owners statement has said: “The [C]ompany’s proposed review outlined in its explanatory note on its opposition to resolution 19 is to be carried out by an organisation that is not independent of Sports Direct and lacks relevant expertise in employment and industrial relations practice.”

Cllr Quinn stated, “LAPFF’s hope is that an independent human capital strategy review will
rectify any workplace practices deemed inappropriate and will help Sports Direct to move
forward from the reputational and financial damage it has suffered.”

The Sports Direct AGM takes place at its controversial Shirebrook facility on 7 September.

Sports Direct AGM: Vote FOR resolution 19

Check out this post by Tom P (see below). If you really think that Sports Direct is acting in a
disgusting and inhumane way to its workforce then contact your pension or insurance provider and ask them to  make sure their fund managers vote for Resolution 19.

Look at your latest statement and find an email or telephone number and let your savings providers know what you think they should do if they own shares in this workhouse.

"I've blogged quite a bit about Sports Direct previously, now it's your chance to do something about it.

The Sports Direct AGM takes place on 7th September, and the company has just issued its notice of meeting. Resolution 19 has been filed by Unite and Trade Union Share Owners in response to the appalling workplace practices that have been exposed at the company's ShireBrook facility.

The resolution calls for the company to undertake a genuinely independent review of its workforce practices, using an organisation or person acceptable to both the board and workforce. This review should look at issues such as the Living Wage, secure employment (the split between temporary & permanent), training and development and union recognition.  

Given everything that has happened at Sports Direct over the past year there is nothing at all controversial in what is being asked for. This is a sensible resolution, with a clear and reasonable ask at a company which has demonstrably failed to manage its workforce properly. Any responsible shareholder should Vote FOR Resolution 19.

If you are a trustee, you need to ask your asset managers how they intend to vote on the resolution NOW. And if you don't like what they say you should instruct them how to vote.

To all colleagues in the labour movement please do all you can to raise awareness of the vote, and to encourage those who are shareholders to make sure they vote in favour.

Vote FOR resolution 19

Sports Direct: The Evil Workhouse: Union shareholders call for independent review of the inhuman employment practices at AGM

"The Trade Union Share Owners group (TUSO) has submitted a resolution to the Sports Direct AGM calling for an independent review of their widely criticised employment practices, which have led MPs to compare the company to a ‘Victorian workhouse’.

Details of the resolution were published today (Friday) in the company’s AGM notice. In the explanatory notes, the Sports Direct board recommends that its shareholders vote against the resolution, stating that it has asked its law firm RPC to compile a Working Practices Report.

Frances O’Grady, General Secretary of TUSO coalition member the TUC, said: “It is bitterly disappointing that the board of Sports Direct has declined to back the resolution. The board’s backing would have sent out a clear public message of reassurance to shareholders that it is serious about addressing deep-seated problems with its employment practices.

“We do not have confidence in the independence of any review led by Sports Direct’s own legal firm. And many of the shareholders we have spoken to share our view of the importance of a fully independent review as the only way to make sure that in future Sports Direct delivers fairness for staff, and decent returns for shareholders.

“We hope that asset managers invested in Sports Direct, who manage the capital of working people, will give the board a clear signal that change is needed by voting for the resolution. And we encourage the management of Sports Direct to continue constructive dialogue with the trade union Unite to improve conditions and respect for staff.”

NOTES TO EDITORS:

- TUSO is a coalition of trade union funds (comprising the TUC, Unite, UNISON and the International Transport Workers Federation) with over £1.5bn assets on the capital markets, including shareholdings in Sports Direct.

- Resolution 19 to the Sports Direct AGM states: “That the board commissions an independent review of Sports Direct International plc’s human capital management strategy and report back to shareholders within six months.” Full explanatory notes along with the board’s full reasons for recommending rejection of the resolution are in the AGM notice for 2016 which can be downloaded from here: www.sportsdirectplc.com/media-centre/press-kit.aspx

- Sports Direct was heavily criticised in a report by the Business Innovation and Skills select committee that was published on 22 July 2016. For more information visit: www.parliament.uk/business/committees/committees-a-z/commons-select/business-innovation-and-skills/news-parliament-2015/working-practices-at-sports-direct-report-published-16-17/

- Sports Direct is currently the subject of an investigation by HMRC into its failures to pay the minimum wage to some staff.

 

Hat tip TUC Website

"Sports Direct" 21st Century Workhouse employer & unacceptable face of capitalism

The press has been full of headlines about vile UK retailer "Sports Direct" as being a "workhouse employer" who treats its workers like dirt.

Where women give birth in its toilets and fleets of "999" ambulances have to be sent out to aid workers who are too frightened to report sick. Never mind those forced to give "sexual favours" to managers to keep their jobs.

Check out this post by Tom P arguing that "Sports Direct" is not only a rotten employer but an economic basket case and risk to those pension and insurance funds that invest in it.

Following the collapse of the share price, investors need to get a grip on the company and its complete lack of governance. Inhumane treatment of its workforce is not only morally wrong but hits the bottom line.

I am really proud of the role of Trade Union Share Owners (TUSO) in helping to bang the drum on this issue. Companies that are human right abusers are also in the long term just bad investments.

 

Why did Sports Direct call ambulances 82 times?

"Dear Friend

Sports Direct’s Shirebrook warehouse is the heart of the giant sportswear retailer, handling clothes and kit that will be sold all over the country. The pace of work there is relentless, and the harsh conditions have long been protested by Unite, who represent workers there. But now a new BBC investigation has confirmed just how damaging Shirebrook is to its workers’ health.

The BBC’s Inside Out team used freedom of information requests to find out that over the last two years, ambulances have been called out a frightening 82 times, with 36 occasions described as ‘life-threatening’. The emergency cases uncovered by the BBC included incidents of chest pains, breathing problems, convulsions and strokes.

View the BBC report here: http://bbc.in/1QWgx0s

Shirebrook operates a ‘six strikes and you’re out’ policy, with even minor infractions of the strict work codes – like chatting to colleagues or taking an excessively long toilet break – punishable with a warning. It’s no wonder many feel scared to take time off sick, even when they really need to, and people are pushed to the limits of their health.

This can’t be allowed to go on.

Please help increase the pressure on Sports Direct to treat its staff decently by sharing Unite’s petition with friends and colleagues. Forward this email, or use social media to spread the word about this campaign: http://bit.ly/sportsdirectpetition

Every time we tell someone about Shirebrook we shine another spotlight on what’s happening there, and help the Unite members who are fighting for respect and decent work.

Thanks for all your help,
Unite Campaigns Team"

Hat tip GoingToWork.org.uk

Update: controversial owner of Sports Direct, Billionaire Mike Ashley has now been charged with  a criminal offence following collapse of one of his companies. 

Workers' Capital Conference 2015 (Day 2)

This is a little late. I have posted here and linked here on the first day of this global annual conference for trade union pension trustees and organisers that took place earlier this month.

(On my https://twitter.com/grayee account I tweeted on the presentations and speeches which I have now used to write this post).

The day was started by a welcome speech from Toni Heerts (FNV) Committee Workers Capital Chair & Co-Chair Paddy Crumlin (ITF). 

The 1st plenary was on "Embedding pro-labour practises & policies for responsible investment". Willem Noordman from the Dutch Pension Federation recognised that engineering unions would have a different view of arms production than others but all unions have plenty in common. There is a real dilemma that if we disinvest from a company because we don't like their practises that we lose all influence over them.

Tom Croft, from the USA Steel Valley Authority in Pittsburgh pointed out that the "S" in "ESG" principles (Environmental, Social and Governance) is too often forgotten.

Pension trustee and national officer, John Neil, from Unite spoke about the Trade Union Shareholders Organisation (TUSO) in the UK. Trade union staff pension funds in the TUC, UNISON, Unite and the ITF combine collectively to make sure that all the shares they own are voted in the interests of "pro-labour" at company AGMs (such as the rogue UK company "Sports Direct" the following day)

A number of international speakers mentioned TUSO at the conference and that they hoped that something similar would be set up in their countries.

I asked the question is there evidence collated of "pro-labour" companies that have proved to be long term good investments that we can show our trustee Boards? Tom Croft responded that in the USA there are certain Private Equity companies that have humanely restructured firms & saved jobs.

Next Janet Williamson from the TUC chaired a panel on 2022 World Cup construction deaths in Qatar.  Gemma Swart from the ITUC spoke about the modern day slave camps in Qatar and that investor pressure over reputational risk can bring about change since the whole country is essentially a family business.

Roel Nieuwenkamp from OECD pointed out that they have introduced binding guidelines on contractors including supply chains with a grievance procedure. "Soft law with hard consequences". He used an example of a complaint by a NGO against Formula1 over human rights in Bahrain and there could be a similar one against Fifa over Qatar.

Hugues Letourneau  from CWC on their human/labour rights campaign in Qatar points out that there has been 279 Indian migrants deaths so far. They are putting pressure on UK and French construction firms via "investor letters".

Cllr Richard Greening from LAPFF  spoke about their engagement with companies exposed in media working in Qatar at AGMs & face-to-face meetings.

(after this session I had to go to a work meeting and missed the debate on infrastructure investment which I understand was pretty heated at times. Some delegates believed that such investment was being misused to privatise public services)

I came back to hear Nick Robins from UNPRI enquiry on the "Design of a Sustainable Financial System".  He believed that there was evidence of a "quiet revolution" in Green investment despite agreeing the Governor of the Bank of England that there was a "tragedy of horizons".

Then 'Labour Standards in Sustainability Rating: How well they incorporated?' Chaired by Elizabeth Umla.

John Jarrett from "FTSE for good" index explained how they did their ESG research and how core Labour standards from all companies are assessed including the supply chain.  Antti Savilaakso from MSCI admitted they have a somewhat similar method to FTSE. They have 130 analysis serving 900 clients. Their key issue is to decide whether bad company behaviour is a one off or structural?

Keeran Gwilliam-Beeharee from Vigeo said they do things differently. They start with the four core ILO standards. Governance issues are the best reported but Labour issues have a low coverage and there is decreasing information on it.

Mario Enrique Sanchez Richter, CCOO trade union economist spoke about his report on the sustainability of rating agencies and how well do they measure? His conclusion was that they do not measure very well.

Final speaker was  Brian Daley from ACTU who stated bluntly that he had not seen any evidence that Labour/Social ratings were actually used by fund managers or advisers to make buy or sell decisions.

In the Q&A Keeran responded to a question on why Labour issues are not being covered by saying that Governance issues such as corruption are seen as more important and lack of investor pressure.

I asked the panel whether rating agencies could give evidence of Companies with good Labour ratings having better long term performance? If they did this would this increase demand for such ratings? John replied that he was not aware of such evidence and agreed that Green and governance issues tended to "crowd out" Labour issues. Brian responded that we should be asking these questions and this should be at the heart of what trustees do.

The closing session was first a video from Liz Shuler, AFL-CIO & CWC co-chair on building an economy & retirement future that we can be proud of. Then final remarks from ITUC General Secretary Sharon Burrow, who said we want rights over our capital but we also want sustainability. While we respect workers in the carbon industry there will be no jobs in a dead planet.

Vote against Keith Hellawell as director of Sports Direct

"VOTE AGAINST resolution 4 to re-elect Keith Hellawell as a Director of Sports Direct International PLC at the AGM 9/9/15

We believe that voting against the chair Keith Hellawell is appropriate in order to send a message about our concerns about management and employment practices, and weak corporate governance at Sports Direct, which the chair must take responsibility for.

Trade Union Share Owners (TUSO) is a group of investors representing the financial assets of the labour movement and committed to long-term responsible investment. We collectively have over £1bn in assets under management and our membership includes affiliated unions that represent workers at Sports Direct.

We urge you to VOTE AGAINST resolution 4 to re-elect Keith Hellawell as a Director of Sports Direct at the Annual General Meeting on the 9thSeptember for the following reasons:

The company’s questionable corporate governance and employment practices are long-standing issues that pose potential risks to investors. Yet the current chair has not addressed them despite concerns being raised repeatedly by various stakeholders, further he has been criticized by MPs for his lack of knowledge of important events at subsidiary USC.

Voting against Keith Hellawell would communicate that shareholders concerns can no longer be ignored and that Sports Direct has to change the way they do business if the long term reputation and success of the company are going to be sustained.

MPs have said that the chairman Keith Hellawell of Sports Direct is presiding over a FTSE 100 company run like a “backstreet outfit” where executives made deals behind the board’s back, withheld payments to force suppliers and landlords to the negotiating table and failed to consult with staff over the pre-pack administration of its fashion chain USC.

For many investors and the wider public, Sports Direct is synonymous with the use of zero hours contracts and other controversial management practices. Sports Direct was even the subject of an investigation by Dispatches on Channel Four in April this year.

The risks posed by the use of zero hours contracts and other management practices revealed by Dispatches need to be disclosed to shareholders, and it is clear that investor expectations are growing. A report issued by the National Association of Pension Funds in June recommended that PLCs disclose the breakdown of full-time, part-time and “contingent” workers. The NAPF specifically highlighted the use of zero hours contracts as a potential risk that investors need to assess.

Shareholders are aware that much of Sports Directs workforce is employed on zero hours contracts, yet continue to be left in the dark about the extent of such practices. The chair has acknowledged that this is an issue by referring to casual employment in his statement in the annual report. However the 48 words that chair spends on the topic provides no further information. In the Corporate Social Responsibility section of the annual report there is neither any commentary on zero hours contracts or a breakdown of numbers in each type of employment.

We believe that the workers of any company are their greatest asset and they should be treated accordingly, something that we must ensure Sports Direct follows.

"Holding your Board to Account" fringe NAPF 2014

I am still catching up on posts about the NAPF (National Association Pension Funds) annual conference earlier this month.

This fringe was one of the better ones. Governance manager, Ashley Hamilton, from Royal London Asset Management (RLAM) spoke about how investors should hold company boards to account and what lessons should we learn from past corporate scandals.

I knew Ashley when she use to work for Pension governance consultants PIRC.  RLAM is part of Royal London which is the UK's largest mutually owned insurance company.

Ashley explained that companies are starting to recognise that investors see good governance as a a means to add value. In Japan it is also seen as a market advantage. Such standards help protect the integrity of the London market and stop certain international companies listing here.

Many investors are "passive". This means they are exposed to all companies in an index. Poor governance does have financial consequences.  For example Olympus's unlawful "kickbacks" and Newscorp, which lost $7 billion in market value in 4 days after the phone hacking scandal was exposed.

Reporting and transparency is not a means to an end.  Need to also look at corporate culture and leadership.

Tesco ticked all of the boxes of standard corporate governance. So what went wrong? the Board lost touch with customers and suppliers. It is now sending executive back to the shop floor.

Barclay's Bank also ticked all the boxes and complied with codes. Lord Turner thought it's problems were a due to a pattern of behaviour, complex structures and aggressive regulatory approaches. There needs to be cultural reform. A recognition that making excess profits at the expense of stakeholders or customers is wrong and self defeating.

Investors should be aware and look out for "Governance hot spots".  Such as a dominant or aggressive CEO who does not welcome debate or discussions: when there is no real "succession plan"; ask does the Chair of the remuneration committee really understand what and why they pay Executives or do they just leave it to the consultants to explain? 

Does the organisation have diverse pools of talent? Good governance is an indicator of risks and of opportunity. Governance is an art not a science.

RLAM vote all UK shares in Annual General meetings and if against or abstain, they will write to companies and explain why. They will take part in collective engagement and as a last resort will make a public statement.  Engagement is best pre-crisis, not post.

Her fund manager colleagues at RLAM recently thanked Ashley for her report on poor practises at the troubled retailer, Sports Direct. They took notice of her concerns and sold out of the company which then went on to lose 20% of its value.

There are of course limits of engagement. An index fund will have to hold shares in companies with bad practises; there is a "free rider problem" and absentee proxy votes still swamp AGMs.  There is also concentration of company AGMs in April and May which means there is time and resource constraints.

Corporate governance is important but not a panacea. Cultural problems are more serious than non-compliance. Trustees should be asking questions of fund managers and consultants. Actively vote your shares and facilitate information flows.

I asked Ashley the question was there empirical proof that companies that are held to account produce superior long term returns?

Ashley responded by saying that there is not that clear data but there is plenty of evidence of what happens when things go wrong.

Sports Direct - what a really rubbish company

Check out Tom P blog here on the antics of retail store, Sports Direct. Its billionaire boss Mike Ashley acts like he runs a private company with no other shareholders; it is certainly not a living wage employer and nearly 90% of its staff are on zero hours contracts.

Next time you want to buy anything at Sports Direct - think again.