Corporate Governance of Nike

Topics: Nike, Inc., Athletic shoe, Bill Bowerman Pages: 5 (1740 words) Published: December 9, 2012
An organization created under the regulations of a state to act as a legal person to carry on business, which can sue or be sued, can issue shares to raise funds with which to start or to increase its capital is a corporation. There are also non-profit corporations organized for religious, educational, charitable or public service purposes. One of the corporations are the “Nike, Inc” which in other words can be said a company. And what here will be discussed the process how a corporate body that is Nike governs, ethic of it and the corporate responsibility of it upon the business world and balance of interest of the stakeholders such as Government, Employees, Customers, Suppliers, Creditors, Community.

Corporate Governance:
From the report of Cadbury Committee Chaired by Sir Adrian Cadbury 1992 it can be quoted the definition of corporate governance "the system by which companies are directed and controlled". It means the outline by which the various stakeholders’ interests are balanced, as the International Finance Corporation states, "the relationships among the management, Board of Directors, controlling shareholders, minority shareholders and other stakeholders". According to Organisation for Economic Co-operation and Development (OECD) in “Corporate Governance, Value Creation and Growth” this is the infrastructure by which the objectives of the corporation are settled, implies in it the objectives’ meeting assurance and monitoring of it. However Sir Adrian Cadbury had mentioned in his book (3rd edition) Five Golden Rules what can help to define good corporate governance on the basis how it operates and can set out a practical methodology for implementing and monitoring its core goals. These rules are having a clearly ethical basis to the business, having appropriate goals and the capability to achieve it through suitable stakeholder decision making model, having an effective strategy process which incorporates stakeholder value, creating an organisation suitably structured to effect good corporate governance and lastly having reporting systems structured to provide transparency and accountability. However this skeleton of a corporation has different types of shape depending on which constituent or interested party in the company’s operations has been given the most importance.

Nike: Origin, governing Functions
A practical approach to set alight on the corporate governance will be to dissect the functional methods and business curriculums i.e origin, objectives, achievements, responsibilities, of a company like Nike. Nike was born as Blue Ribbon Sports (BRS) in 1964, founded by University of Oregon’s track athlete Philip Knight and his coach Bill Bowerman. At that time it was only a distributor of Japanese shoes. But the purpose of it was making quality American shoes. In 1972 Name changed to NIKE Inc, which was derived from the Greek goddess. The team also convinced marathon runners at Olympic Trails to wear NIKE shoes and this resulted in strong advertising especially when several runners were some of the top finishers. Popularity continued to grow throughout the 70s by this time NIKE had 50% of the US running shoe market. NIKE goes public1988 with the Famous slogan “Just do it” introduced and company acquired Cole Haan. Throughout its existence, NIKE endorsed and sponsored different athletes like Michael Jordan the famous basketball player or Tiger Woods the young outstanding golf player and so many. Afterward in 1992, opens its first NIKETOWN store and a few years later, it acquired Canstar Sports, which included hockey equipment maker Bauer. In 1997 the Jordan brand of athletic shoes was launched. 1998 was a hard year for it because of falling sales in Asia and had to cut the cost and employees. From 2000 NIKE started to move little more towards the electronic and technological sector and historical impact on the industry, NIKE released a line of running shoes, introduced a line of athletic electronics,...
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