Britain’s biggest sportswear retailer JD Sports Fashion has bowed to critics of its corporate governance by saying it will split long-standing boss Peter Cowgill’s role as executive chairman and recruit a chief executive over the next year.
The group said on Thursday “a comprehensive process” to divide the role would commence shortly.
“We fully accept that the composition of our board should reflect the current scale, momentum and global positioning of the group as well as its increased level of market capitalisation,” it said.
Corporate governance guidelines in Britain recommend that the roles of chairman and chief executive should be kept separate.
JD Sports, whose stock market value has grown to £9.5 billion ($13.1 billion) as it has expanded across Europe and the United States, also acknowledged a need to create “additional diversity” within its board.
Cowgill, who has been executive chairman since 2004, has been criticised by shareholder advisory groups for taking a bonus in a year the group received taxpayer money for business rates relief and staff furloughed during Covid-19 lockdowns.
Some groups have recommended investors vote against the company’s remuneration policy at Thursday’s annual shareholders’ meeting.
Ahead of the meeting, JD Sports said it would consider repaying government support on payroll costs but defer a final decision until there was certainty on both the full easing of pandemic restrictions and the consequences of any further lockdowns during the peak trading period this winter.
The group said it had seen positive trading in the period since stores reopened after lockdowns, particularly in the United States.
It forecast profit before tax and exceptional items for the full 2021-22 year of “no less” than £550 million, up from previous guidance of £475-500 million and £421.3 million made in 2020-21.
After this year’s purchase of DTLR Villa in the United States and Marketing Investment Group in central Europe, JD Sports trades from about 3,300 stores across 29 countries.
By James Davey; Editor: Mark Potter