While the majority of shareholders voted against Keith Hellawell’s re-election as chairman of the retailer, the majority vote of the chief executive ensured his reappointment.
More than half (53.96%) of independent shareholders voted against the re-election of Hellawell.
However, he was saved by Mike Ashley, Sports Direct's majority shareholder, who voted his 55% of the company in favour of Hellawell's reappointment.
Ashley said, "Keith has my full backing and will be continuing in his role on the basis that he has the unanimous support of the board.
“I note that many of those who voted against Keith have acknowledged that we have made positive progress since the AGM."
The chairman had previously offered to step down in light of the publication of a report prepared by RPC that highlighted the retailer’s controversial working practices.
However, Sports Direct said at the time he would stay in his role in order to assist with making the planned improvements.
Ashley Hamilton-Claxton, Royal London Asset Management’s corporate governance manager and Sports Direct shareholder, said the company needed “fundamental change at the top”, starting with the chairman. He claimed that Hellawell had not shown sufficient leadership to tackle the employment practices issues.
A first vote took place in September last year, when 52.9% of the independent shareholders voted against the chairman's re-election.
At the time, Sacha Sadan, director of corporate governance at Legal & General Investment Management (LGIM) said, “For the third consecutive year we will be voting against the re-election of the chairman at Sports Direct. We first voted against the chairman in 2014 when the share price performance was still strong trading at around £7.00. Today it is trading at around £3.08.”
Following today’s vote, Paul Lee, head of corporate governance at Aberdeen Asset Management, said, “Though we welcome the positive progress the company has made over the last three months, we remain deeply concerned about its governance. We are therefore again opposing the election of Mr Hellawell.”
He added, “Poor governance and oversight has dogged the company for far too long and more change is required. We welcome the board’s recognition of this but words must now be matched with deeds.”
The RPC report published in September found “serious shortcomings” in working practices in Sport Direct’s Shirebrook warehouse and set out the end of controversial practices such as the zero hour contracts, searches after shifts and a strikes system.
The company has faced significant scrutiny from both MPs and the media after a Guardian investigation revealed the controversial practices.
Sports Direct said at the time it would suspend the strikes policy with immediate effect and replace the zero hour contracts with guaranteed 12-hour contracts. However, the new contract hours rule only applies to permanent staff and not the agency workers.
It said it would also ensure staff are paid above the National Minimum Wage, as the previous breach of the minimum wage regulations in the warehouse was “unacceptable but unintentional”.
In November, Sports Direct saw itself mired in another scandal when members of the Business, Energy and Industrial Strategy Select Committee accused Sports Direct of secretly recording their surprise visit to the firm's warehouse.
Committee chair Iain Wright said he felt “anger and disappointment” at the alleged placing of a camera in a room which the committee had requested to hold a “brief and private” meeting during the visit.