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
monitor 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 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
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
represents shareholders’ interest in the operation of
the business. 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
other stakeholders, including employees, consumers, customers,
suppliers, shareholders, 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 senior management team, and ultimately monitors
its performance. The Board has the responsibility to ensure
that in good times, as well as difficult times, management is
capably executing its duties.
The Board is also responsible for reviewing and establishing
procedures designed to ensure that the Company’s
management and employees operate in a legal and ethically
responsible manner.
The Company has a longstanding commitment to corporate
purpose, including corporate responsibility, sustainability,
human rights, global community and social impact, and
diversity 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 and inclusion, and periodically reviews the
Company’s policies, practices and contributions made in
fulfillment of its purpose.
ROLE OF DIRECTORS
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. 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
and other significant issues affecting the business of the
Company.
Directors are expected to spend the time and effort necessary
to properly discharge their responsibilities. Accordingly,
directors are expected to attend meetings of the Board and
committees on which he or she sits, and to review material
distributed in advance for the meetings. It is expected that a
director who is unable to attend a Board or committee meeting
(which, it is understood, will occur on occasion) will notify
the Chairman of the Board or the Chair of the relevant
committee.
Selection of the Chairman of the Board and CEO
The Board elects the Chairman of the Board and the CEO.
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.
Chairman Emeritus
The Board believes that it will benefit from the valuable
experience and insights of the former Chairman of the Board.
Accordingly, the Board may appoint the former Chairman to the
position of Chairman Emeritus. The Chairman Emeritus shall not
be a member of the Board and shall not have a vote on matters
before the Board or its committees. The Chairman Emeritus has
a standing invitation to attend meetings of the Board and its
committees.
Board Membership Criteria and Independence
The ultimate responsibility for the selection of nominees for director resides with the Board. The Corporate Responsibility, Sustainability & Governance Committee oversees the process of identification, screening, and recommendation of new directors, and annually recommends a slate of directors for approval by the Board and election by the shareholders. 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.
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. 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.
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 does not have a policy limiting the number of
other company boards upon which a director may sit. However,
the Corporate Responsibility, Sustainability & Governance
Committee considers the number of other company boards on
which a prospective nominee is a member. Accordingly,
directors are expected to advise the Chairman 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.
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.
Retirement Age
It is the general policy of the Board that directors first
elected after the 1993 fiscal year will not stand for
re-election after reaching age 72.
Board 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 and 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 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
senior management.
Any interested parties desiring to communicate with the
non-management directors regarding the Company may contact the
Secretary of the Company, Ann M. Miller, One Bowerman Drive,
Beaverton, Oregon 97005-6453.
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 and industry, as well as other areas relevant to their service on the Board. 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.
Board Meetings
Frequency of Meetings
There are five regularly scheduled meetings of the Board each
year. Meetings may be held in locations that present
opportunities to expose the Board to various facets of the
Company’s business, are related to other Company business, or
connected with a shareholder meeting.
Agenda for Board and Committee Meetings
The Chairman of the Board, 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.
Attendance of Management at Board Meetings
At the invitation of the Board, members of senior management
recommended by the CEO 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
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.
Committee Matters
Names and Independence of Board Committees
The Company has four standing committees: Audit & Finance; Compensation; Corporate Responsibility, Sustainability & Governance; and Executive. 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 CEO 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, after consultation with the Chairman of the Board,
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
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 plans for succession of the Chairman, the CEO and
certain other senior management positions in order to assure
the orderly functioning and transition of the management of
the Company in the event of emergency or retirement of senior
management. As part of this process, the Chairs of the
Corporate Responsibility, Sustainability & Governance
Committee and the Compensation Committee, in consultation with
the Chairman and CEO, assess management needs and abilities in
the event a transition becomes necessary.
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:
- 6x for the Chief Executive Officer;
-
3x for the other Named Executive Officers (as listed in the Company’s proxy statement); and
- 2x 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,
and the charter of each key committee of the Board shall be
posted on the Company’s website.