Nike Is Tight-Lipped About Its Management Shake-Up & Misconduct Issues — and It’s Frustrating

As Nike announced back-to-back executive departures last week and a company memo by CEO Mark Parker hinted at a crackdown on alleged inappropriate workplace behavior, there was a nervous excitement that something big was about to happen.

With the buzz of #MeToo an ever-present backdrop in the new business landscape, was the most recognizable athletic brand on the cusp of showing corporate citizens how reform is accomplished? Was the Swoosh about to teach other megafirms how to give perpetrators of inappropriate behavior — and their enablers — the boot (or, perhaps, the sneaker)?

But alas, a vague press release announcing Nike brand president Trevor Edwards’ retirement was followed by a elusive confirmation that Jayme Martin, VP and GM of global categories, was no longer with the company. And a conference call on Thursday — in which Nike’s chief reiterated the company’s commitment to maintaining an “environment where every Nike employee can have a positive experience and reach their full potential,” and once again thanked Edwards for his service — left much to be desired. (Some reports suggested this week the moves were made after female employees circulated an internal survey about issues at the company.)

With no explanation about what actually happened, it’s very difficult to tell whether one should praise Nike for acting swiftly to remedy some internal ethical dilemma or take the company to task for not doing enough.

It’s becoming an all-too-familiar conundrum.

A powerful event (or series of events in close succession) — a school shooting, an unraveling of years of sexual misconduct by a powerful executive or the police killing of an unarmed person of color — becomes the catalyst for galvanizing a nation and giving rise to a movement.

Whether its #MeToo, #BlackLivesMatter or The Women’s March, for many of us, the recent uptick in grassroots activism — undoubtedly bolstered by social media — has breathed new life into causes addressing traumas that hit close to home.

As these movements rise in prominence, major corporations are often swept into the conversation, and their leaders are compelled to make public statements on the issues in question. For example, Nike’s Parker threw support behind #BlacksLivesMatter in July 2016, and Dick’s Sporting Goods CEO Ed Stack has become an important voice in the gun debate following the shooting at Stoneman Douglas High School in Florida last month.

For consumers and public citizens, when these well-paid and well-respected leaders throw their support behind causes that are close to their heart, there’s a knee-jerk reaction to applaud them.

At the same time, there’s a nagging skepticism about the authenticity of these actions — since, for leaders of publicly traded firms, the main objective is always looking out for shareholder value.

For example, when Dick’s and Walmart both amended their gun sales policies in the wake of the Florida school shooting, many advocacy groups and anti-gun activists commended their actions. (The support has been particularly high for Dick’s chief, Stack, who has since taken his efforts even further, penning a powerful op-ed in The Washington Post calling on Congress to tighten gun laws.)

Supporters of gun reform were also quick to criticize privately owned Bass Pro Shops, owner of hunting and shooting retailer Cabela’s, for being among the few national retailers to continue to sell assault-style rifles.

But branding and crisis management experts have pointed out that the decision on the part of Walmart and Dick’s to speak out on the issues and amend their gun policies — and Bass Pro’s apparent decision not to — could have had less to do with a desire to support a cause and more to do to with their bottom lines and shareholder value.

Crisis and reputation management expert Hersh Davis-Nitzberg, in speaking to FN on the issue in February, explained that most corporate responses to public outcry are driven by revenue strategy.

Part of the analysis for companies when determining how to respond to major public issues that may or may not impact their business, Davis-Nitzberg said, is to assess how much of their other business categories will be affected. For instance, a sporting goods retailer might thrive on sales of footwear and gear, with much less to lose if it abandons selling guns.

In the case of Nike — a publicly traded company that must always contend with how its statements and actions impact shareholders and its stock — if a scandal of #MeToo proportions actually happened internally, perhaps it would consider it wise to keep the details under wraps. (This could be different than how Nike might react in an external situation, such as one involving #BlackLivesMatter, where supporting the movement could be deemed an opportunity for the firm to engage with and support a core customer demographic.)

So far, where Wall Street is concerned, Nike’s strategy in the recent executive shake-up has been working. Among analysts, there is hardly a murmur about the executive departures. And on Thursday’s investor conference call, market watchers had no questions for Nike’s management on the issue.

The gambit is clear: Wall Street or the public can’t get up in arms over Nike’s management shake-up if there isn’t enough information to be upset about.

While it’s incredibly frustrating for those among us who hope to see corporations truly rally behind the causes we care about, as long as corporations operate to create shareholder value first, it’s a cross we’ll continue to bear — unless someday you can take advocacy to the bank.

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