Shares in JD Sports Fashion came under pressure on Thursday after executive chair Peter Cowgill quit following a review of the retailer’s internal governance.
The fast-growing group said it had decided to accelerate the separation of the roles of chair and chief executive as a consequence of the review, with Cowgill – who has led JD Sports since 2004 – stepping down with immediate effect.
It was widely reported that Cowgill, 69, had resisted moves by the board to split the roles, despite the company expanding significantly in recent years. Cowgill has held both roles since then chief executive Barry Bown left in 2014.
Kath Smith, senior independent director and interim chief executive, said: “The business has developed strongly under Peter’s leadership into a world-leading, multi-channel retailer with a proven strategy and clear momentum.
“However, as our business has become bigger and more complex, what is clear is that our internal infrastructure, governance and controls have not developed at the same pace.
“As we capitalise on the great opportunities ahead of us, the board is committed to ensuring that we have the highest standards of corporate governance and controls appropriate to a FTSE 100 company to support future growth.”
Pentland, JD Sports’ majority shareholder, said it was “the right time for the business to fulfil its future ambitions under a new governance structure and new leadership”.
The stock fell sharply following the announcement, made towards the end of trading on Wednesday, and declined further as trading resumed on Thursday. By 0900 BST, however, the shares had regained some ground, and were trading just under 1% higher at 112.95p.
Last year JD Sports faced a shareholder a revolt after it emerged Cowgill – who joined the business as finance director in 1996 – had been paid nearly £6m in bonuses despite the retailer accepting around £100m in government support.
And earlier this year JD Sports and takeover target Footasylum were fined nearly £5m by the Competition and Markets Authority for sharing commercially sensitive information after the regulator had blocked their merger.
Helen Ashton, former finance director of Lloyds Banking Group and the chair of JD Sports’ audit and risk committee, will become acting non-executive chair. A search for a permanent chief executive and chair is underway.
