JD Sports lays out plan to improve corporate governance

© Reuters. FILE PHOTO: JD Sports logo is seen on the exterior of a store in London, Britain, November 17, 2021. REUTERS/May James

(Reuters) -British retailer JD (NASDAQ:JD) Sports Fashion laid out plans to overhaul its corporate governance structure and internal controls on Wednesday after a review led to the exit of long-time boss Peter Cowgill last month.

The company, which announced the plans with its results for the year ended January 29, posted annual profit that more than doubled from last year to 654.7 million pounds ($800 million) on strong demand for its sports leisure wear. Its shares rose 3.4%

JD Sports ousted executive chairman Cowgill last month, saying its internal governance and controls had not kept pace with the firm's growth. The group has been run by Cowgill since CEO Barry Bown stepped down in 2014.

Britain's largest sportswear retailer has come under regulatory scrutiny from the competition regulator for various issues, including its relationship with Footasylum and the pricing of football kits.

JD Sports said it has completed a review and has a plan to rebase its governance, risk and control environment which includes separating the roles at the top.

"The process to recruit a CEO is ongoing with a number of high calibre candidates at different stages of consideration," said Interim Chair Helen Ashton. "A process to recruit a new Non-Executive Chair is also progressing at pace."

The review also stressed on the need for a more experienced board, the company said.

The UK's Competition and Markets Authority (CMA) provisionally found earlier this year that JD Sports along with a rival broke competition law over Rangers FC merchandise pricing.

It also fined the group, along with Footasylum, a combined 4.7 million pounds due to meetings that the regulator said breached an order that barred the two merged companies from integrating further.

($1 = 0.8181 pounds)