Sports Direct has pledged an external review into its board of directors as part of an independent report into its working practices.

The announcement comes after rumours circulated last week of a mutiny against the company’s chairman amongst Sports Direct shareholders.

A report into its treatment of workers is due to be published by the company before the AGM, due next month, and has already pledged £1 million to compensate workers who have not been paid the minimum wage.

Oliver Parry, head of corporate governance at the Institute of Directors, said: “Sports Direct has a mountain to climb in rebuilding its reputation. Conducting an external board evaluation, and publishing the results, would be a welcome first step. This can’t be just be a cosmetic exercise – the board must act upon the recommendations of the review.

“Mike Ashley admitted to a committee of MPs that the company had perhaps grown too big for him to manage, and there is clearly a need to make sure the governance structure is providing independent challenge to management decisions.”