Nike faces challenges posed by shareholders and workers

Nike is grappling with two significant challenges that have garnered attention in both the corporate and social arenas


Arjuna Capital, an investment advisory firm hailing from Massachusetts, has put forth a proposal urging Nike to be more transparent and reveal data pertaining to pay equity among its women staff members and minority workforce. Concurrently, Tulipshare, a shareholder advocacy group, is pushing Nike to compile a comprehensive report evaluating the effectiveness of its supply-chain policies concerning equity objectives and human rights commitments.

These proposals, however, require the backing of over 50 per cent of shareholders for approval, and Nike is not legally bound to implement them. The final vote results will be disclosed in an upcoming filing with the US Securities and Exchange Commission.

Despite receiving support from Institutional Shareholder Services, a proxy advisory firm, Arjuna Capital’s resolution on pay equity reporting has suffered its second defeat since 2021. In August, Institutional Shareholder Services recommended that investors vote in favour of the proposal.

Nike is also under mounting pressure to enhance transparency within its supply chain. More than 12 investors have jointly demanded that the company compensate garment workers in Cambodia and Thailand. These workers allegedly suffered wage losses due to factory closures during the COVID-19 pandemic. This collective appeal was officially conveyed in a letter dated September 7th, addressed to John Donahoe, CEO, Nike.

In response, Nike had reportedly ceased sourcing products from the Cambodian factory as far back as 2006. Additionally, the company stated that it has found “no evidence” to substantiate claims of owing back pay to workers in Thailand.

These developments underscore the complex interplay between corporate governance, shareholder activism, and labour rights issues confronting the global sportswear company.

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