Sports Direct International (SDI) has reneged on a pledge to have a review of its corporate governance policies carried out by an independent party – instead assigning it to Reynolds Porter Chamberlain (RPC), a law firm that has previously worked for the British sports retailer.

SDI argued in a statement that RPC had delivered a strong report on working practices at the group, and added that it had faced frustrations over delays in appointing an independent party for the review. SDI said that it had twice accepted candidates put forward by the Investor Forum, only for them to subsequently be withdrawn. Any further delays would distract from its ambitions to become the “Selfridges” of sports retailing, SDI suggested.

SDI declared that ambition when detailing its sharp decline in underlying operating profit for the six months up to Oct. 23, as previously reported. Faced with the relatively weak performance of its international retail business, the retailer again referred to these plans when announcing its intention to divest the rights it holds in the Dunlop brand.

SDI had announced just before its annual shareholders' meeting in September that it would be ordering a review of its corporate governance. While engaging in discussions with the Investor Forum, which represents several weighty shareholders, the retailer added later that month that the report would be supervised by an independent party. SDI said earlier this month that RPC's appointment had been decided after careful reconsideration.

SDI's decision on the corporate governance report came shortly after Mike Ashley, majority shareholder and chief executive at SDI, again gave his full backing to Keith Hellawell, the company's chairman – even though a majority of SDI's independent shareholders voted against his re-election for the second time since September.

At an extraordinary meeting on Jan. 5, which had to be convened due to the turn of events in September, votes representing 80.9 percent of SDI's capital were in favor of Hellawell's re-election. But due to persistent unease about governance issues at Sports Direct, about 54 percent of the votes cast by independent shareholders came out against the chairman.

Several prominent investors had suggested before the meeting that they remained frustrated about governance issues. The resignation of Dave Forsey, SDI's former chief executive, was regarded as a step forward, as it allowed Ashley to take up a function aligned with his influence at the company. SDI's board also made significant concessions ahead of last year's assembly, in terms of working conditions and governance.

Yet some shareholders still have a long wish list as regards to corporate governance. Apart from an independent review, the items include the full implementation of reforms promised on working conditions, improved reporting and the reinforcement of the management team with more directors and executives who have the clout to lead a company of this size. It probably doesn't help that SDI shares lost about half of their value last year.

Ashley said in a statement that Hellawell has his full backing and the unanimous support of the board. He pointed out that many of the shareholders who voted against Hellawell acknowledged the progress made at SDI since the previous assembly. Hellawell said in September that he would step down if the majority of independent shareholders again came out against him at the 2017 assembly. Ashley said he had asked Hellawell to reconsider this intention.

An external evaluation of SDI's board is planned for later this year.