'Passing the baton' | Mike Ashley's Frasers exit is a time to reflect on his turbulent leadership

Mike Ashley's Frasers exit is a time to reflect on his turbulent leadership

Controversial business magnate Mike Ashley has announced he is stepping down from the board at Frasers Group.

In a statement released yesterday, September 20, Frasers Group confirmed that Ashley, who earlier this year stepped down as CEO of the retail giant to be replaced by his son-in-law Michael Murray, will not be standing for re-election as a Director at this year's Annual General Meeting, and will therefore step down from the board. He will continue to be available to the Board and Senior Management in an advisory capacity when called upon, the firm said.

Announcing his departure, Ashley commented: "Since Michael Murray took over the leadership of Frasers Group earlier this year, the business has gone from strength to strength. It is clear that the Group has the right leadership and strategy in place and I feel very confident passing the baton to Michael and his team. Although I am stepping down from the Board, I remain 100% committed to supporting Frasers and Michael's plans and ambitions, and I look forward to helping the team as and when they require me. My commitment and support as a Frasers' shareholder is as strong as ever."

Michael Murray, CEO, added: "Mike has built an incredible business over the past 40 years and, on behalf of the Board and the Group, I want to thank him for all he has done. With our new strategy and leadership team, we are driving this business forward at pace and we are all excited for the future. We are grateful to have Mike's support and expertise available to us as we continue the next stage of Frasers Group's journey."

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Ashley’s discerning career leading a multitude of brands including Game, House of Fraser and Sports Direct, started back in 1982 when he was 18 years old; the company now has more than 800 stores, and has grown to include a raft of other key names including Everlast and Lilywhites.

However, whilst Ashley’s empire, which started with just a single market stall, continues to flourish, it’s controversial business style and debatable brash handling of certain historic situations that many will remember as his key legacy. Ashley’s particular brand of leadership is one many such aspiring leaders have followed, and it’s continued to divide opinion.

So what can we learn from the legacy of one of the UK’s most successful, and divisive, businessmen?

He was allegedly responsible for poor working conditions

Whilst the meteoric rise of Ashley’s empire flooded headlines with his latest acquisitions, a 2016 investigation by the Business, Innovation and Skills committee found that Ashley was responsible for perpetuating poor working conditions for many of his Sports Direct staff.

A BBC report at the time claimed that staff were paid below the minimum wage. Committee Chairman Iain Wright said at the time that evidence heard by MPs suggested Sports Direct's working practices "are closer to that of a Victorian workhouse than that of a modern, reputable High Street retailer".

Wright also noted that Ashley publicly claimed to visit the company’s warehouses ‘at least once a week’, highlighting that such conditions were unacceptable. "It's seems incredible that Mike Ashley, who visits the warehouse at least once a week, was unaware of these appalling practices," he said.

His company banned home working

Although not exclusively a Mikey Ashley decision, Frasers Group axed its home working policy this summer after bosses claimed staff were being less productive when not in the office.

Multiple publications have reported that the retail group, which owns House of Fraser and Sports Direct, previously had in place a ‘Frasers Friday’ policy that allowed employees to work from home on the final day of the working week. However, the firm has now reportedly scrapped the initiative, which began in 2020 at the height of the move towards remote working, as a result of the pandemic. But Frasers’ COO David Al-Mudallal has now told staff that it has become “an unproductive day of the week”.

Al-Mudallal reportedly said in an internal memo that there were “too many examples of people or teams not being contactable when they need to be…and colleagues who via their social media profiles are demonstrating they’re not treating Friday as a working day”.

A Spokesperson for Frasers Group, which employs more than 25,000 people, said: “We have an incredible workforce of dedicated colleagues, and in-person collaboration is key to how we deliver value together.

“We believe that we are all at our best when we work together in an office environment.”

He came under fire during the pandemic

In 2020, during the Coronavirus pandemic, reports alleged that Ashley-owned Sports Direct and House of Fraser had secretly pressured furloughed managers to come into stores once a week.

According to the Daily Mail, the chains allegedly asked managers to return to work on a voluntary basis, and were reportedly asked not to clock in. It has been alleged that in at least two cases they were asked to pack up stock to transfer back to the main warehouse that is based in Derbyshire, so that the stock could be sold online.

One manager anonymously told The Guardian: “They are doing it secretly so people don't know what they are doing.”

This was followed by another who said: “Everyone is scared. Why do I have to be frightened and likely spreading disease if they are not giving us anything?”

Yet, this isn’t the first time Mike Ashley and Frasers Group has come under fire for the way in which the organisation has dealt with the coronavirus pandemic.

Back in March 2020, chiefs at the company revealed that they would be making a U-turn following a decision to keep stores open, despite Government warnings to close all non-essential shops.

At the time, Ashley’s decision was met with vast criticism. Kevin Maguire, Associate Editor at the Daily Mirror, slammed owner Ashley, branding him as “one of Britain’s very worst bosses, forcing frightened employees into work”.

Will things change with Ashley's departure?

Ultimately, this remains to be seen, as his outgoing is not the clean break that it might first seem. As aforementioned, Ashley's son-in-law is now at the helm, and the company has already continued its streak controversial decisions (banning home working, for example) under his watch. Furthermore, Ashley remains the company's largest shareholder (owning around 70% of Frasers Group) and has already expressed willingness to provide advice to the board in future. 

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