What can Sports Direct teach us about fairness and corporate culture?

'As an individual, would you tolerate that? Is that fair?' Challenges to some dubious employment practices such as docking pay by 15 minutes for 1 minute’s lateness. This question, and implied demand for fairness, didn’t come from a leading human rights campaigner, church leader or management guru. It comes from Mike Ashley, Executive Deputy Chairman of Sports Direct (and its major shareholder). Ashley elaborates further, commenting on some of Sports Direct’s employment practices with reference to his children – if they went to work in an environment where some of these policies were prevalent, he wouldn’t be OK with that. It would be “unreasonable” and “unfair.”

The concept of fairness at work is something we’re very interested in at the CIPD and have researched extensively. It has multiple definitions or interpretations. One person’s fair – distribute rewards to those most deserving because of their talents – is another person’s dystopia. It risks leaving the most needy or frail vulnerable and insecure. For some, fairness is about process; show that you’ve considered all angles and exercised good judgement. For others that sounds like a bureaucratic nightmare - the outcome’s what matters.

I like Mr Ashley’s definition of fairness – it respects us all as individuals and speaks to the golden rule, do as you would be done by. Ashley wanted fair treatment during Tuesday’s Select Committee hearing.  Whether playing the starry-eye-ingénue-(‘it’s all very complicated, my business is very big, I can’t be everywhere’) or the bombastic-entrepreneur (‘I have a helicopter’), Ashley wanted to be understood. He was looking for the golden rule to be enacted in his favour - ‘put yourselves in my shoes, it’s a tough job.’ He wanted this rule invoked in his favour way more, it seems, than he’s prepared to have it enacted in favour of others, his workforce for example.

In its 2015 Corporate Social Responsibility Report, Sports Direct says “our people are what makes the Sports Direct Group such a success.” In fact, during the hearing, Ashley made the remark “I didn’t make Sports Direct, it made me.” Both statements imply symmetry and mutuality. But the repeated plea for understanding at the hearing – what it’s like to run a large business that has gone from a dinghy to a supertanker, that operates across the world – is not reflected in Mr Ashley’s relationship to his staff. These are people who, allegedly, operate on a “six strike” policy. Six strikes and you’re out. A strike seems to be given with a high degree of managerial discretion – too long in the loo, “horseplay” or receiving a phone call for example. Mr Ashley hasn’t engaged with Unite since Sports Direct’s last AGM and how he remains in touch with his people and their concerns isn’t through formal feedback mechanisms or surveys, but by “walking around.” If he did a survey, he claims, people wouldn’t fill it in. That this might be because of a complete and utter lack of faith in a leader who seems to treat his staff almost without any respect for their basic humanity, much less the fairness that he refers to, doesn’t seem to occur to him. His position is that all his people “want Sports Direct to do better” but perhaps only for his gain, not theirs.

I don’t think it’s fair to expect Mike Ashley, or any other leader, to be in every meeting, making every decision or every plan. But neither is it fair of Mr Ashley to pretend that he thinks that’s his job. I think it’s fair for Sports Direct staff to expect their CEO to set a leadership tone and develop and govern a strong and healthy culture from the top. One that respects individuals’ legal rights, their well-being – financial, physical and emotional – and their real role in Sports Direct’s success. Mr Ashley, if you didn’t make Sports Direct, if it really made you, fairness would say that you are significantly in debt to your workforce. Paying in line with the legal minimum is the very least part of this debt. But the real debt would be repaid by honouring their humanity and creating a workplace where you’d be proud for your children to work and thrive.

If you’re interested in workplace cultures and finding out more about how the tone can be set from the top, look out for our submission to the Financial Reporting Council’s Culture Coalition Report later this month, which will explore the relationship between corporate culture and value creation, and tackle important questions including: who is responsible for corporate culture? How important is ‘tone from the top’ for driving behaviour and culture? How can you embed values and behaviour across all levels of the organisation?

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  • Anonymous

    Yes, the CEO leads the way, but where's the mention of the HR Director in this CIPD blog or the role of a professional HR function in contributing to the culture of the organisation?

  • Hi, it’s a good challenge. Without knowing the specifics I can’t comment on the HR team at Sports Direct but what we do know is that over many years HR has been seeking to assert its authority both as a sound “business partner” and as a custodian and advocate of good employment practice.  But we also know that’s a difficult line to tread and is certainly not made easier when the tone from the top is not conveying/convincing that employees are stakeholders in business success; whose well-being is an end in itself.  

    No easy answers but creating positive cultures, and the role of the HR professional in achieving this, is a big area of focus for us to explore with you all in the coming months. Here’s our work on principles of professional practice (www.cipd.co.uk/.../best-good-practice-hr-developing-principles-profession.aspx) which discusses some of these challenges for HR practitioners in more detail.

  • Anonymous

    One of the better articles/blogs I have read on this topic. Also and excellent response in relation to the HR dept question. It's a pity other HR Professionals don't display the same standards as yourself Laura. Members of one CIPD group on LinkedIn seemed to think it was appropriate to search for SD HR individuals on LinkedIn and comment openly on their qualifications and mock them in an open group conversation. Thank you Laura for a balanced blog.

  • Nobody was mocked on the CIPD member group, any company that ends up in the news for the wrong reasons will have its HR people under scrutiny, because people will want to understand what was/is going wrong. Sports Direct is a perfect example about the race to the bottom in the standards of employing people. Nobody knew you were an ex-employee until you raised the issue that you didn't like the subject and it should be censored. No search needed as you looked at others profiles, Over a course of a working life we will all at some stage work for a crap company, it's no reflection on any of us, you just learn from it, and appreciate the truly great employers out there.

  • Laura,

    Been one bad retail bad news story after this week, as well as Sports Direct, the shambles of BHS and now ASOS copping the blame for what is going on at its outsourced Logistics operation

  • Anonymous

    Oh come on - all this talk of HR and values. The tone of the company does not come from HR. HR Are there to enact managements policies. The tone comes from one place and one place only - the top. It is through staff seeing the leader's reactions and behaviours to events that determines how they in turn react to situations under their jurisdiction. It's like how a child learns how to behave from its parents. It's really that simple. I've seen it in my own business and. I've seen it many other businesses.

  • Anonymous

    what are the McKinsey 7s of Sports Direct?

  • I could be wrong, but I think corporate culture is defined by the government with the Limited Liability Act 1855 which separates the management of the business from the ownership.  Managers main concern is profit for shareholders.  Shareholders or owners are only interested in profit and not really interested in how the place is managed.  Therefore people are not managed very well.  It is interesting to consider that the Quakers were opposed to this Act on the grounds that it would encourage moral irresponsibility.