Mike Ashley is not a PR company’s dream client. Rumour has it, they try and keep him away from the media. He is also not the best advertisement for the super rich.
He has been called bombastic, brazen, belligerent and blustering – self-interested he is undoubtedly. Whatever you think of him, however, his claims that growth has been responsible for much of what has gone on in recent months might just be in part true.
His handling of both the Guardian and BBC reports last year into the complex Sports Direct operates through in Shirebrook, Derbyshire has been appalling. For many months he challenged the authority of the parliamentary select committee investigating the case for the Department for Business, Innovation & Skills Committee, calling them a “joke”. But he finally attended on 7 June.
His claims to care about the people at Sports Direct sounded hollow from the start and his cries about being unable to make as higher profits this year came across as totally offensive.
It has been an unpleasant scandal. No wonder the Institute of Directors (IoD have described the company as a “scar on British business”, given that so many of the reports have been substantiated.
Ashley finally attended a face-to-face grilling to answer these claims. These included paying staff less than the minimum wage, based on time spent by staff going through security systems in what was technically time after clocking out.
Both undercover reporters for the Guardian and UNITE union representatives have described the conditions as “Victorian”, and where 3,000 agency workers are governed by a strike system of discipline meaning even minor offences can quickly add up to dismissal.
UNITE, ever one to jack up the eloquent drama, claims that this in turn makes people so frightened they are unable to function properly and become a health and safety risk to themselves and others.
Read more about Mike Ashley and Sports Direct:
- Businessman Mike Ashley “regrets” buying Newcastle United
- How Sports Direct scored an own goal with a bit of nepotism
- Sports Direct tycoon Mike Ashley’s discount store has been dubbed “Son of Woolworths”
That many of the unacceptable practices existed is no longer in doubt. Ashley did acknowledge that the warehouse had been paying below the minimum wage and agreed that fining staff for being late was something he could not condone and he told MPs that some issues and unpleasant surprises that had been found had now been addressed. It also seems incredible that they paid staff on pre-paid credit cards, and then charged them £10 for the use of it.
Ashley is known for being dangerously outspoken and he admitted yesterday that the firm had probably outgrown his ability to run it. He told the committee that many of the problems had come from the rapid growth and systems not keeping up. He admitted that he no longer had knowledge of large parts of the company’s business and disagreed that he should be held responsible as he is not even there most of the time. “I can’t be responsible for every single thing that goes on in Sports Direct. I can’t be”.
If truthful, we could all cite times when systems haven’t kept up with our growing businesses. As they grow, undoubtedly we do not know every single thing that goes on anymore. Ashley is right, it is not possible. Instead, we delegate – and to delegate we have to trust that those people will uphold our duty of care.
But this is a dangerous business. We have all had staff who have betrayed our trust at one time or another. There is therefore always the possibility that we have staff who cause us to unknowingly break laws. And while I am all for the principal of overall responsibility of duty of care, as laws on business owners become increasingly onerous, this becomes, in turn, increasingly frightening.
While on the one hand I am all for every business owner taking their duty of care with great seriousness, some new committee needs to examine very carefully a law that penalised people for matters which are genuinely beyond their realistic control and allows employees responsible to remain unaccountable. Otherwise, the day will come when owners are victimised and it becomes too great a risk to run a business at all.
Sometimes business owners do not know, or cannot know, what is happening. I do not think this is necessarily true in every case. If it is true in Ashley’s, I am in doubt. He certainly does not help himself, and is absolutely right in saying he is not Father Christmas.
If you’re of the belief Mike Ashley is on his way out, check out the biggest CEO resignations of 2015.