Nike shareholders want proof that the company is committed to its diversity efforts. Some shareholders have gone so far as to ask the activewear giant to disclose diversity data at its annual shareholders meeting Wednesday.
The move is part of a measure created by “As You Sow,” a nonprofit shareholder advocacy group, which asks Nike for greater transparency and statistics around things such as pay and hiring along gender and racial lines. Backers of the initiative say it will hold Nike — which has long stated that racial justice and equity is one of its core values by way of pledges to fight racism and using prominent spokespeople of color — accountable.
“Nike has allocated significant capital into building its reputation as a leader on social justice issues,” said Meredith Benton, workplace equity program manager at As You Sow and founder of consultancy Whistle Stop Capital. “Investors are seeking reassurance that its own practices are sufficiently implemented to protect its very valuable brand.”
As You Sow’s shareholder request, which was originally proposed in April, pointed out that Nike has used famous spokespeople, such as Colin Kaepernick, to advance its agenda. In addition, after George Floyd, a Black man, was killed by a white police officer in May 2020, Nike’s president and chief executive officer John Donahoe wrote a letter to employees condemning racial injustice and pledging to invest $40 million over the next four years in Black communities in the U.S.
“While we strive to help shape a better society, our most important priority is to get our house in order,” Donahoe wrote in the June 2020 letter. “Simply put, we must continue to foster and grow a culture where diversity, inclusion and belonging is valued and is real.
“We know Black Lives Matter,” Donahoe wrote. “We must act and we must act to help create lasting change that addresses the systemic racism in our society.”
Yet the shareholder resolution also pointed out that Nike also has a history of allegations of gender bias and racial discrimination within the company. Some executives from Nike’s C-suite have exited in recent years after reports surfaced regarding their behavior to certain groups. Trevor Edwards, president of Nike Inc.’s flagship brand, for example, resigned in early 2018 after alleged misconduct at the company.
“Nike has faced damaging allegations of harassment and discrimination on the basis of gender, race and gender identity,” read the As You Sow resolution. “Reports of a toxic workplace have continued even after allegations of sexual harassment and gender discrimination led to significant turnover of male executives in 2018.”
Representatives for Nike did not respond to requests for comment on Tuesday. But the company did write an opposition statement in its most recent proxy statement with the Securities and Exchange Commission, saying the “board of directors believes the proposal is unnecessary because the information Nike already publicly discloses with respect to our initiatives and diversity metrics is responsive to the essential objective of the proposal and provides our shareholders with meaningful insight into our progress in this area.”
Nike also released a few key data metrics regarding its progress in its Diversity, Sustainability and 2025 Goals report last March. Among them, representation of racial and ethnic minorities at the vice presidential level domestically increased eight percentage points in 2020 to 29 percent. In addition, women made up 49.5 percent of the entire workforce, including 43 percent of the jobs at the director level and above, in 2020. Racial and ethnic minorities in the U.S. held 27 percent of leadership positions at the director level or higher in 2020.
It is unclear the total number of minorities who work at Nike, but as of fiscal year 2019, or pre-pandemic, 22 percent of Nike’s roughly 76,000 employees worldwide identified as Black or African American. Nike is aiming for 45 percent representation of women globally at the vice president level, 30 percent representation of racial and ethnic minorities at the director level and above in the U.S. and 35 percent representation of racial and ethnic minorities throughout the U.S. corporate workforce by 2025.
Still, As You Sow also pointed out that Nike does not release its EEO-1 Component 1 Report to the public. The mandatory form is used to collect workforce demographic data from private companies with 100 employees or more, including data about race, gender and job categories.
“Nor does the company release meaningful data related to the hiring, retention or promotion of its diverse employees,” the April proposal read. “Nike provides insufficient quantitative data for investors to determine the effectiveness of its human capital management program as it relates to workplace diversity.”
Nike will hold its annual shareholder meeting virtually on Wednesday.