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News digest 22/07/16: Mike Ashley ‘must be held accountable'

22 July 2016 by Henry Ker

Mike Ashley ‘must be held accountable’ - read more

The latest governance stories in the news

Mike Ashley ‘must be held accountable for some appalling working practices’

Sports Direct ‘is a particularly bad example of a business that exploits its workers in order to maximise its profits’, according to a report from the Business, Innovation and Skills committee. Although the report did qualify that statement with 'it is unlikely that it is the only organisation that operates in such a way.'

It further stated that the committee ‘will be holding Mr Ashley’s feet to the fire, so as to see what progress he has made on improving working conditions for workers at his premises.’ The report follows the BIS committee investigation into allegations of poor treatment of workers at its warehouse in Shirebrook.

The report concludes: ‘Mr Ashley told us that, ultimately, he is always responsible for Sports Direct. We welcome and thank him for his openness and willingness to engage with us when he − finally – appeared before us. However, he must be held accountable for some appalling working practices at both the Sports Direct shops and warehouses, either for not knowing about them, or for turning a blind eye to such practices in the interests of maximising the revenue of Sports Direct.’

Read our recent employment law analysis of the Sports Direct saga, ‘Lessons to be learned’.

 

New charity type for biggest not-for-profits proposed

A new type of charity for the biggest organisations has been endorsed by two leading figures in the voluntary sector. Sir Stephen Bubb, formerly of Acevo, and Sir Stuart Etherington, Chief Executive of charity group NCVO, have argued a different structure and form of governance for charities with a turnover in excess of £100 million is needed.

In a recent lecture, Mr Bubb said that a pressing question for the sector was if the traditional governance structure of administration by a trustee board was still right for ‘those large organisations that have grown in size and structure so much that they almost resemble a new category’. The suggestion could see unitary boards coming in place for large charities, with senior managers becoming directors and payment for non-executive directors.

 

US business leaders look to end quarterly earnings guidance

The idea of scrapping quarterly earnings reporting has been backed by a group of the most powerful investors and business leaders in the US.

The group of 13 executives, led by Jamie Dimon, JP Morgan Chase Chief Executive, have released a statement of corporate governance principles. One asks boards to consider whether their quarterly guidance ‘does more harm than good’. It goes on to say a company ‘should not feel obligated to provide earnings guidance — and should determine whether providing earnings guidance for the company’s shareholders does more harm than good,’ and ‘Making short-term decisions to beat guidance is likely to be value destructive in the long run.’

The principles follow a year of discussion among some of the top US business leaders. They cover senior executive remuneration and state that non-GAAP numbers should not be reported in a way that obscures GAAP results.

 

Banking fraud is biggest cyber crime

Banking fraud accounts for around 40% of all the 6 million online cyber-crime incidents in Britain over the past year. New figures from the Office of National Statistics reveal there were 2.5 million reported cyber crimes involving banking and credit accounts. The total number is a 6% fall in the number of crimes compared to the previous year.

It is the first time fraud questions have been added to the official Crime Survey for England and Wales − the survey asks people about crime they have experienced and includes offences not reported to police.

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