Is Nike Management Putting Social Justice Ahead of Its Shareholder Duties?

Nike has just cancelled a Betsy Ross shoe because Colin Kaepernick (a Nike endorser) claimed he and others found the specific flag design offensive, saying the flag from that period is associated with slavery in America.  Is Nike so focused on social justice issues, they are not completing their duties to their shareholders.

The Air Max 1 USA was intended as a celebration of U.S. Independence Day, with a flag that featured 13 white stars in a circle on the heel. The design was created during the Revolution and is often called the Betsy Ross Flag

When the Betsy Ross flag was created we were at war with the British fighting for personal freedoms such as freedom of speech– something we hope Mr. Kaepernick can respect because he is using that freedom of speech to promote his causes.

If one person, or a small group, finds something offensive, do we pull it?  What about the large group of people that see this move by Nike as offensive? And what if we view this issue not through a racial prism, but a veteran prism? Many veterans see this as an injustice to our nation, especially veterans who fought and died for our country.

Veterans often see the U.S. flag (even the Betsy Ross Flag) as a symbol that brings glory and honor to our nation, fighting off oppressors and tyranny. Most veterans see the meaning of the flag in a completely different light than a former NFL quarterback and some of his buddies. They see Mr. Kaepernick’s public stances (or in this case taking a knee) as offensive.

This is not a company dedicated to truth and justice. Nike knowingly just mislead the public about China tariffs. Nike claimed in May 2019:

Nike Warns Price of Sneakers Could Skyrocket If Trump Imposes Tariffs on China

Nike and Adidas wrote a open letter to President Trump claiming a Chinese tariff would be:

“…catastrophic for our consumers, our companies and the American economy as a whole.”

Now two months latter in July they claim to their shareholders about China:

Andy Campion joined Nike in 2007 as Vice President of Global Planning and Development, leading long-range financial and strategic planning. He was appointed Chief Financial Officer of the Nike Brand in 2010, responsible for leading all aspects of financial management for the company’s flagship brand

“We have not seen any impact on our business to date,” Nike CFO Andy Campion said this week (Nike earnings: US-China trade conflict hasn’t hurt business, company). Nike noted strong sales growth in China in its fourth-quarter earnings report as executives downplayed any impact of the ongoing U.S.-China trade dispute on the company’s business.

Wow! What a change in their public statements. First they told the public tariffs could skyrocket sneaker costs and would be catastrophic for customers. Then a few months later they tell their shareholders they see no impact and that analysts were overblowing the China tariff trade war.

In May, while Nike was saying China tariffs could cause great problems, Puma’s CEO (with a weaker position in China) claimed:

“To be honest, the trade war between China and the U.S. is a little bit of a gift…We can produce targeted products for the Chinese market in China, which saves for duty and other costs.”

Nike bows to get mainland support while a million Chinese people march against extradition from Hong Kong to China. In China, Nike has no problem stepping out of politics and social justice issues to support the government.

Colin Rand Kaepernick (born November 3, 1987) is a former American football quarterback known for his political activism regarding systematic racism against African-Americans and kneeling in protest during the National Anthem.

Nike was not telling the consumers the truth about tariffs. They appeared to be more concerned with throwing their influence behind their own views of social justice– while at the same time hiding many of their own transgressions. Nike has been rocked by allegations of bullying and sexual discrimination of women. In response, Nike has shown a number of senior executives and managers the door.

In marketing you never buy an ad program that increase sales from half the population while sending the other half away angry. You want to encourage consumers in the market to buy your products without damaging your reputation with your existing clients. Nike’s longtime strategy was to use the world’s best athletes to promote their shoes. With the Kaepernick campaign, they are using social justice to split their market into fans and haters.  They know, as everyone with a background in marketing knows, this is bad for business but good for social justice.

Nike has shown that their fiduciary duty to shareholders is not their first priority. In China, they support the government and ignore oppression. In the U.S., where they are headquartered, they lecture their consumers about “values.” This is no longer the same Nike that was once dedicated to making the best athletic shoes worn by the best athletes.  Nike view is that launching a shoe with the American flag on the 4 of July {America Birthday) is now offensive.

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Jay Black

I try to write fact based articles that most people won't. Lets improve this world including both Corporate and Government malfeasance. If you have a lead about a ethical failure please comment on my article or in many of my comments.

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