The Board of Directors (the “Board”) of NIKE, Inc. (the “Company”) has adopted the
following Corporate Governance Guidelines (the “Guidelines”) to assist the
Board in the exercise of its responsibilities. These Guidelines reflect the Board’s
commitment to monitoring the effectiveness of policy and decision-making both
at the Board and senior management level, with a view to enhancing long-term
shareholder value and corporate purpose, including corporate responsibility,
sustainability, human rights, global community and social impact, and diversity,
equity and inclusion. These Guidelines will be reviewed annually by the
Corporate Responsibility, Sustainability & Governance Committee and the Board,
and are subject to modification from time to time by the Board. Waivers of
these Guidelines may be made only by the Corporate Responsibility, Sustainability
& Governance Committee or the Board.
THE BOARD
The Board’s Purpose
Role of the Board: The Board, which is elected
by shareholders, is the ultimate decision-making body of the
Company, except with respect to those matters reserved to the shareholders. The
Board’s goals are to build long-term shareholder value, including by promoting
the sustainability of the Company, and to responsibly address the concerns of
shareholders and other stakeholders, including employees, consumers, customers,
suppliers, governments, local communities and the general public.
The Board elects the corporate officers comprising the
senior management team, who are responsible for the conduct of the
Company’s business. The Board acts as an advisor to and oversees the performance of
the senior management team in order to ensure management continues to
effectively execute its duties.
Oversight Responsibilities: In addition to its
general oversight of management, the Board also performs a number of
specific functions, directly or through its committees, including:
- Corporate Integrity and Compliance: The Board is
responsible for reviewing and establishing procedures designed to
ensure that the Company’s management and employees operate in a legal and
ethically responsible manner.
- Corporate Purpose: The Company has a longstanding
commitment to corporate purpose, including corporate
responsibility, sustainability, human rights, global community and social
impact, and diversity, equity and inclusion. The Board, through its Corporate
Responsibility, Sustainability & Governance Committee, provides guidance to
management on issues related to corporate purpose, including
corporate responsibility, sustainability, human rights, global community and
social impact, and diversity, equity and inclusion, and periodically reviews
the Company’s policies, practices and contributions made in fulfillment of its
purpose.
- Corporate Culture: The Board is responsible for
reviewing and overseeing the Company’s culture and evaluating
management’s efforts to align corporate culture with the Company’s stated
values, corporate purpose and long-term strategy. The Board proactively
reviews and monitors management efforts to instill an appropriate tone and
culture throughout the Company, which includes the respectful treatment
of employees, efforts to promote diversity, equity and inclusion, efforts to
promote innovation, providing a workplace free of sexual harassment and
other forms of harassment, fostering trust between employees and management and
promoting ownership and accountability for an ethical
corporation.
- Strategy Oversight: Normally it is management’s duty to
formalize, propose and implement strategic choices, and the
Board’s role to approve strategic direction and evaluate strategic results. The
Board believes it is important to be deeply engaged and involved in
overseeing the Company’s long-term strategy and business initiatives and that
the Company’s business strategies and prospects should be discussed
as a matter of course at regular board meetings with updates on significant
items being provided in between regular board meetings, in addition to
periodic more intensive sessions regarding matters of corporate strategy and
performance. To accomplish this, the Board engages in a regular
dialogue with the Company’s Chief Executive Officer (“CEO”) and other members of
the senior management team. The Board regularly reviews with
the senior management team the Company’s long-term strategic business plans,
prospects and other significant issues affecting the business of the
Company.
- Risk Oversight: While the Company’s management team is
responsible for day-to-day management of the various risks
facing the Company, the Board takes an active role in the oversight of the
management of key business risks. The Board implements its risk
oversight function both as a whole and through committees, which play a
significant role in carrying out risk oversight. While the Audit & Finance
Committee is responsible for oversight of management’s risk management policies,
oversight responsibility for particular areas of risk is allocated
among the Board committees according to the committee’s areas of responsibility
as reflected in the committee charters.
ROLE OF DIRECTORS
The core responsibility of the directors is to exercise their business judgment to act
in what they reasonably believe to be in the best interests of the Company
and its shareholders and in compliance with all applicable laws and regulations.
Directors are expected to spend the time and effort necessary to properly
discharge their responsibilities, including by attending meetings of the Board and
committees on which he or she sits and reviewing materials distributed in
advance of each meeting.
BOARD LEADERSHIP
The Board elects the Chair of the Board and the CEO. The
Board believes that whether to have the same person occupy the offices of Chair of the
Board and CEO should be decided by the Board, from time to time, in its business
judgment after considering relevant factors, including the specific needs of the
business and what is in the best interests of the Company’s shareholders.
In order to help ensure robust independent leadership on
the Board, if the individual elected as Chair of the Board is the CEO, or if the Chair
of the Board is not independent, the independent directors of the Board will elect an
independent director to serve as Lead Independent Director for a term of three years in
accordance with the Company’s Lead Independent Director Charter.
As described in the Company’s Lead Independent Director
Charter, the Lead Independent Director shall:
- Serve as a liaison between the Chair and the independent directors.
- Approve meeting agendas for the Board.
- Advise the Chair regarding the sufficiency, quality, quantity, and
timeliness of information provided to the Board
- Ensure that meeting schedules permit sufficient time for discussion
of all agenda items.
- Have the authority to call meetings of the independent directors.
- Be available for consultation and direct communication with major
shareholders, if requested.
- Preside at meetings of the Board at which the Chair is not present,
including executive sessions of the independent directors.
- Report to the Chair on all relevant matters arising from executive
sessions of the independent directors.
- Assist in the Board’s annual self-evaluation.
- Have a standing invitation to attend committee meetings as
ex-officio member.
- Together with the Chair, recommend to the Board the retention of
advisors and consultants who report directly to the Board.
The Board annually reviews its leadership structure to
ensure effective guidance to and oversight of management.
Size of the Board
It is the policy of the Board that the number of directors not exceed the number that
can function efficiently as a body, while properly staffing necessary Board committees.
In recent years, the Board has had 10 – 14 directors, and it is the belief of the Board
that this size permits diversity of experience without hindering effective discussion or
diminishing individual accountability.
Chair or Director Emeritus
The Board believes that it will benefit from the valuable experience and insights of the
former Chair and other directors of the Board. Accordingly, the Board may appoint the
former Chair to the position of Chair Emeritus or a former director to the position of
Director Emeritus. Any Chair Emeritus or Director Emeritus shall not be a member of the
Board and shall not have a vote on matters before the Board or its committees, however,
such individuals will have a standing invitation to attend meetings of the Board and its
committees.
Board Membership Criteria
The ultimate responsibility for the selection of nominees
for director resides with the Board. The Corporate Responsibility, Sustainability &
Governance Committee oversees the process of identifying, screening, and recommending
new directors as well as the assessment of whether to renominate current directors, and
annually recommends a slate of directors for approval by the Board and election by the
shareholders. Consistent with the Board Candidate Requirements Policy adopted by the
Board, nominees for director are selected on the basis of their character, judgment,
experience, skills, understanding of the Company’s business, and ability to devote time
to Board responsibilities, taking into account the overall diversity of the Board, which
the Company views broadly to include, among other things, differences in backgrounds,
qualifications, experiences, viewpoint, geographic location, education, skills and
expertise, professional and industry experience and personal characteristics (including
gender or gender identity, ethnicity/race and sexual orientation). The Corporate
Responsibility, Sustainability & Governance Committee will consider director
candidates recommended by shareholders and evaluate them in the same manner that it
evaluates candidates recommended by others.
Director Independence
It is the policy of the Board that the Board be comprised
of a majority who qualify as independent directors under the listing standards of the
New York Stock Exchange ("NYSE"). Independence is determined by the Corporate
Responsibility, Sustainability & Governance Committee and the Board, in the exercise
of business judgment, which review the relationships that each director has with the
Company. The Board may adopt and disclose categorical standards to assist it in
determining director independence. Additional independence standards also apply to
certain committee members:
- A member of the Audit & Finance Committee may not, other than
in his or her capacity as a member of the Audit & Finance Committee, the Board,
or any other Board committee, accept any consulting, advisory, or other compensatory
fee from the Company, or be an affiliated person of the Company or a subsidiary
thereof.
- For Compensation Committee members, the Board must consider all
factors specifically relevant to determining whether a director has a relationship
to the Company that is material to the ability to be independent from management in
connection with the duties of a Compensation Committee member, including the source
of compensation of the director, any consulting, advisory or other compensatory fee
paid by the Company to the director; and whether the director is affiliated with the
Company or any subsidiary.
Director Resignation Policy
Any nominee for director in an uncontested election who
receives a greater number of votes "withheld" from his or her election than votes "for"
such election shall tender his or her resignation for consideration by the Corporate
Responsibility, Sustainability & Governance Committee. The Committee shall recommend
to the Board the action to be taken with respect to the resignation. The Board will
publicly disclose its decision within 90 days after the certification of the election
results.
Other Company Directorships
The Company values the experience directors bring from other boards on
which they serve, but recognizes that those boards may also present demands on a director's time and
availability. As a result, it is the policy of the Board that no director may simultaneously serve on
the board of more than three other public companies (in addition to the Company) or, in the case of a
director who is an executive officer of a public company, no more than one other public company (in
addition to the Company). In addition, a member of the Audit & Finance Committee may not
simultaneously serve on the audit committee of more than two other public companies unless such service
is approved by the Board. Directors are also expected to advise the Chair of the Board and the chair of
the Corporate Responsibility, Sustainability & Governance Committee in advance of accepting any
other company directorship or any assignment to the audit committee of the board of any other company.
The Corporate Responsibility, Sustainability & Governance Committee will conduct a review, at least
annually, of director commitment levels to confirm that all directors comply with this policy.
Directors Who Change Their Present Job Responsibility
When a director’s principal occupation or business association changes substantially
during his or her tenure as a director, it is the general policy of the Board that the
director is expected to submit his or her resignation for consideration by the Corporate
Responsibility, Sustainability & Governance Committee. If such submission is made,
the Corporate Responsibility, Sustainability & Governance Committee will review the
effect, if any, of the change on the interests of the Company, and recommend to the
Board whether to accept the resignation.
Director Succession Planning
The Corporate Responsibility, Sustainability &
Governance Committee engages in evergreen succession planning for the Board, the
committees of the Board and key leadership roles on the Board (including the Chair of
the Board and the chairs of each committee). As part of this succession planning
process, the Corporate Responsibility, Sustainability & Governance Committee
considers the tenure of the current directors, the mix of skills, expertise and
experiences on the Board and on each committee and the diversity of the directors.
BOARD REFRESHMENT; TERM LIMITS; RETIREMENT AGE
The Board recognizes the importance of periodic board
refreshment and maintaining an appropriate balance of tenure, experience and
perspectives on the Board. The Board values the contributions of both newer perspectives
as well as directors who have developed, over a period of time, an increased
understanding of, and insight into, the governance and business of the Company and the
issues confronting it. Thus, the Board does not believe that arbitrary term limits on
director service are appropriate. As an alternative to strict term limits, the Corporate
Responsibility, Sustainability & Governance Committee reviews each director's
continuation on the Board annually, taking into account factors including the needs and
diversity of the Board, the contributions and qualifications of the director and the
director's interest in continuing as a director.
At the same time, it is the policy of the Board that
directors will not stand for re-election after reaching age 72.
Director Compensation
A director who is also an officer of the Company does not
receive additional compensation for service as a director.
The Company believes that compensation for non-employee
directors should be competitive and should encourage increased ownership of the
Company's stock through the payment of a portion of director compensation in Company
stock. The Compensation Committee reviews the level and form of director compensation,
including how it compares to director compensation at companies of comparable size,
industry, and complexity. Changes to director compensation are proposed to the Board for
consideration.
Board Access to Management and Advisors
Directors have unfettered access to the Company’s senior management team and other
employees. The Board and each committee of the Board has the authority to obtain advice
and assistance from outside legal, accounting or other advisors selected by the Board at
the expense of the Company.
Board Interaction with Investors, Analysts, Press, and
Customers
It is the policy of the Company that management speaks for the Company. This policy does
not preclude non-employee directors from meeting with shareholders, but it is suggested
that those meetings be held with management present. It is strongly suggested that
directors refer inquiries from institutional investors, analysts, the press, or
customers to appropriate members of senior management.
Any interested parties desiring to communicate with the Board, non-management directors,
or with any individual director may do so in writing addressed to the intended recipient
or recipients, c/o Corporate Secretary, NIKE, Inc. at One Bowerman Drive, Beaverton,
Oregon 97005-6453. The Office of the Corporate Secretary reviews all such correspondence
and regularly provides to the Board a summary of all such communications that relate to
the functions of the Board, a committee of the Board, or that otherwise warrant Board
attention. The Office of the Corporate Secretary will also refer any relevant
correspondence directly to a director, as appropriate.
Board Orientation and Continuing Education
The Company conducts an orientation for new directors and
provides opportunities for continuing education to current directors to educate them
about the Company, the Company’s business, industry and risk profile, as well as other
areas relevant to their service on the Board (such as requirements, trends and best
practices with respect to corporate governance, cybersecurity, human capital management,
corporate responsibility and sustainability). The orientation and continuing education
processes involve providing directors with materials and opportunities to meet with
other directors and key senior management. The Corporate Responsibility, Sustainability
& Governance Committee may request directors to participate in continuing education
programs related to their responsibilities or committee assignments on the Board. The
Company will also provide directors with access to relevant, accredited external
director education programs at the Company’s expense.
Self-Evaluation of the Board
The Corporate Responsibility, Sustainability & Governance Committee oversees an
annual evaluation of the Board and the committees required by the NYSE to assess their
effectiveness and performance. The assessment is conducted to ensure the Board and its
committees are effective and productive and to identify opportunities for improvement
and skill set needs.
Board Meetings
Frequency of Meetings
The Board will meet at least four times per year.
Additional meetings may be scheduled as necessary or appropriate in light of the needs
of the Company. Meetings may be held in any location that supports the Board in the
exercise of its responsibilities, including locations that present opportunities to
expose the Board to various facets of the Company’s business or are related to other
Company business, or solely by means of remote communication.
Agenda for Board and Committee Meetings
The Chair of the Board and the Lead Independent Director (if any), and the chairs of the
Board committees, set the agenda for Board and committee meetings, respectively.
Directors are invited to suggest inclusion of items on the agenda, and are free to raise
at any Board meeting subjects that are not specifically on the agenda. Materials related
to agenda items are provided to directors sufficiently in advance of Board meetings,
where necessary, to permit directors to review and prepare for discussion.
Director Attendance
Directors are expected to attend meetings of the Board and committees on which he or she
sits as well as the Company’s annual shareholder meeting, either in person or by means
of remote communication. It is expected that a director who is unable to attend a Board
meeting, committee meeting or annual shareholder meeting (which, it is understood, will
occur on occasion) will notify the Chair of the Board or the chair of the relevant
committee.
ATTENDANCE OF MANAGEMENT AT BOARD MEETINGS
At the invitation of the Board, members of senior management attend Board meetings or portions thereof
for the purpose of presenting information regarding a particular matter or participating in discussions.
The Board is free to excuse members of senior management from meetings at any time.
EXECUTIVE SESSIONS OF NON-EMPLOYEE DIRECTORS
To ensure free and open discussion and communication among
the non-management directors of the Board, executive sessions or meetings of
non-employee directors without management present are held at least once each year, over
which the Lead Independent Director presides as chair. In the absence of a Lead
Independent Director, the responsibility to preside as chair of the executive sessions
or meetings is rotated among the chairs of the Board committees as designated by the
Corporate Responsibility, Sustainability & Governance Committee. Non-employee
directors who are not independent under NYSE rules may participate in these executive
sessions, but independent directors should meet separately in executive session at least
once per year.
Committee Matters
STANDING BOARD COMMITTEES AND INDEPENDENCE
The Company has four standing committees: the Audit & Finance Committee; the
Compensation Committee; the Corporate Responsibility, Sustainability & Governance
Committee; and the Executive Committee. The purpose and responsibilities of each
committee are described in charters adopted by the Board. The Audit & Finance;
Compensation; and Corporate Responsibility, Sustainability & Governance Committees
are composed entirely of independent directors. The Chair of the Board chairs the
Executive Committee. The Board may, from time to time, form a new committee or disband a
current committee depending on the circumstances. In addition, the Board may form ad hoc
committees from time to time, and determine the composition of the committees.
Committee Assignments
The Corporate Responsibility, Sustainability & Governance Committee makes
recommendations for approval by the Board with respect to assignment of directors to
committees, and the chairs of committees. The Corporate Responsibility, Sustainability
& Governance Committee annually reviews committee assignments.
Committee Meetings
The chair of each committee, in consultation with the committee members and senior
management, determines the frequency, agenda, and length of committee meetings
consistent with any requirements of the committee’s charter. The schedule of all
committee meetings is furnished to all directors.
MANAGEMENT REVIEW AND SUCCESSION PLANNING
Evaluation of CEO
The Compensation Committee is responsible for overseeing the performance evaluation of
the CEO. The Compensation Committee considers (1) achievement against approved financial
performance measures and targets (such as revenue, net income, and earnings per share),
and (2) other factors such as leadership, achievement of strategic goals, market
position, and brand strength, which are signals of Company success. The Compensation
Committee endeavors to reflect the CEO’s performance in the CEO’s compensation.
Succession Planning
The Board recognizes the importance of succession planning in order to assure the
orderly functioning and transition of the management and oversight of the Company in the
event of emergency or retirement. Therefore, the Board plans for succession of the
Chair, the CEO, and other executive officers directly and through its committees. The
Board leads CEO succession planning together with the Compensation Committee, Chair,
Lead Independent Director (if any) and CEO. The Board leads Chair succession planning
together with the Corporate Responsibility, Sustainability & Governance Committee,
Chair and Lead Independent Director (if any). The Board reviews the CEO and Chair
succession process at least annually. The Compensation Committee leads succession
planning for all other executive officers, including succession plans, leadership
development programs, and the Company’s development and succession management efforts.
STOCK OWNERSHIP
The Board believes that significant stock ownership by
directors and executive officers further aligns their interests with the interests of
the Company’s shareholders. Accordingly, the Board requires that (a) within five years
after joining the Board, each non-employee director hold Company stock valued at five
times his or her annual cash retainer, and (b) within five years after being appointed
to his or her position, each executive officer hold Company stock valued at the
following multiple of his or her annual base salary:
- 8x for the Chief Executive Officer; and
- 3x for all other executive officers.
POLICIES AND GUIDELINES
Copies of the current version of these Corporate Governance Guidelines, the Company’s
code of business conduct and ethics (Inside the Lines), and the charter of each standing
committee of the Board are posted on the Company’s website.