Sports Direct has elected an employee to attend its board meetings, after a series of scandals over the way the company is run and treats its staff.
The appointment of Alex Balacki, 30, follows a tumultuous 16 months for the retailer. This included its billionaire founder, Mike Ashley, being hauled before MPs to be questioned over “Victorian” working conditions at the company’s warehouse, following a Guardian investigation that exposed how workers at the depot were being paid less than the legal minimum wage.
Balacki is a Barnstaple store manager who has been with the company for 13 years. He will begin his 12-month role as an employee representative later this spring.
However, company watchers cautioned that the new workers’ representative – who is based 250 miles away from the retailer’s controversial Shirebrook, Derbyshire warehouse – would struggle to effect meaningful change.
Oliver Parry, head of corporate governance at the Institute of Directors, the business lobby group that has described Sports Direct as “scar on British business”, said: “It’s very important that boards understand the interests of the company’s staff, so it’s encouraging that Sports Direct has appointed a worker representative.
“However, the firm still faces wider corporate governance issues. There remains no effective check on the power of Mike Ashley, who is majority owner and also a board director. Shareholders have tried to raise governance standards at Sports Direct but, unfortunately, I fail to see how a worker representative will be able to do so on their own.”
Unite, the union that has led protests against working conditions at the retailer, warned that Balacki “will face an uphill struggle to have workers’ concerns heard and to resolve the deep-rooted problems across the business”.
The union’s Luke Primarolo added: “Unite wishes [Balacki] well and would like to offer to meet as soon as possible so that we can brief him on the experiences of the workforce.
“We urge that he makes one of his first acts to persuade the company that agency workers on insecure hire-and-fire contracts are offered permanent appointments.”
The vast majority of workers at the Shirebrook depot are hired via temporary employment agencies and have fewer rights than full-time staff.
In a letter to staff, Ashley said: “I’d like to be the first to congratulate Alex, who will help us to continue to make a positive difference by ensuring that your voice is heard in the boardroom.
“I have said many times that this is a company that was built by the great people who work here. I am therefore delighted that the people at Sports Direct have voted to choose the company’s first UK elected workers’ representative.”
Balacki said he was “very proud” to have been picked by staff ahead of two rival candidates. “It’s now my role to ensure the people of Sports Direct are heard.”
The company said that he is “due to attend all scheduled meetings of the board over the next 12 months”, which critics complain is a watered-down version of Ashley’s original proposal.
Last year, when announcing the move, the billionaire said: “I would like to take somebody either from the retail, the warehouse, the office, and make them a fully board member – on the board – to make sure they totally have their say, they totally have a vote. I’m massively in favour of that”.
