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Nike Social Responsibility Audit

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NIKE, INC.

SOCIAL RESPONSIBILITY AUDIT

BY:

NIKE'S MISSION STATEMENT

To bring inspiration and innovation to every athlete in the world.

NIKE'S CORPORATE RESPONSIBILITY MISSION

We must help the company achieve profitable and sustainable growth.

We must protect and enhance the brand and company.

In the corporate world, companies have a responsibility to act in ways which go beyond the aspect of making money. The movement of Corporate Social Responsibility has grown in recent years from an activity of an activity of earnest companies to a priority of corporate America. Based upon a book by Howard R. Bowen, "Social Responsibilities of the Businessman," he derived five basic arguments for social responsibilities: (1) Managers have an ethical duty to consider the broad social impacts of their decisions; (2) Businesses are reservoirs of skill and energy for improving civic life; (3) Corporations must use power in keeping with a broad social contract; (4) It is in the enlightened self-interest of business to improve society; and (5) Voluntary action may head off negative public attitudes and unwanted regulations.1 In light of these kinds of social responsibilities, Nike, Inc., (Nike) in the fiscal year of 2004 (FY04) released its first Corporate Social Responsibility Report in 3 years relying heavily upon the Global Reporting Initiative (GRI) indicators. The GRI is a process and institution whose mission is to develop and publicize global responsibility and sustainability guidelines. These guidelines (indicators) are used voluntarily for reporting economic, environmental, and social aspects about a company's activities, products, and services. Throughout the rest of our social responsibility audit of Nike we will also implement these indicators to determine whether the company has applied their goals and objectives based upon the mission statement of the company in relation to the areas of social responsibility.

In Nike's FY04 social responsibility report, its brand presidents stated that the company as a whole has set out to achieve three strategic objectives. These objectives are: (1) To effect positive, systemic change in working conditions within the footwear, apparel, and equipment industries; (2) To create innovative and sustainable products; and (3) To use sport as a tool for positive change and campaign to turn sport and activity into a fundamental right for every young person. WHAT SHOULD WE SAY HERE TO LEAD INTO ECONOMICS?

ECONOMICS

(HOI)

PHILANTHROPY

Philanthropy could be defined broadly as the efforts corporations make above and beyond regulation to balance the needs of stakeholders with the need to make a profit. This also terms with Nike's Corporate Responsibility Mission Statement of: "We must help the company achieve profitable and sustainable growth." Nike presents the issue of sustainable growth in their "Overview" of responsibility on their website, stating that "sustainable growth also requires us to find ways of generating profit while minimizing our potentially negative impact on communities or nature." So, in order for Nike to generate this profit and reduce the negative impact on the communities that they share, they contribute cash, product, and/or in-kind exchanges to the community.

Based upon information received from Business Week and Nike's FY04 responsibility report, Nike sets a target of contributing 3 percent (3%) of the preceding year's pre-tax profits. For the FY04, total contributions, which included cash and product/in-kind, was $37.3 million dollars and for the FY05 total contributions total $46.1 million. Nike also appreciates the donations of their employees and in the U.S. matches eligible employee contributions to valid non-profit organizations dollar-for-dollar and also matches hours spent towards volunteer work at $10 per hour for a total match of $5,000 each year for every employee. In all, Nike contributed $3.1 million in FY04 and $3.4 million in FY05. In Europe, when the employee becomes involved in a charitable sporting event, the company matches the funds that they raise. In the United Kingdom, they began an EXTRA TIME program, which gives employees paid time off six days of the year for volunteer activities. These contributions are not without merit. In the United States, the framework of our tax system allows portions of these contributions to be deducted from their tax liability at tax time. While in Europe and the United Kingdom, the company has chosen these types of contributions due to the legal and tax issues in these countries. While Nike is giving back to the community, the contributions are reflective of their sustainable growth - generate a profit while giving back to the community that they share.

Nike's objective of the use of sport as a tool for positive change and campaign to turn sport and activity into a fundamental right for every young person is a focus of their contributions to the community. One of their largest contributions to this objective is the company's NikeGO Afterschool program that was developed in conjunction with SPARK (Sports, Play, and Active Recreation for Kids) which was designed to increase the quality and quantity of physical activity in American schools. This program began in cities such as Chicago, Los Angeles, New York, Portland, Akron, and Washington D.C. to help bring physical education back into schools. Based upon information received from NikeGo.com and the National Association for Sport & Physical Education, one in four children does not attend any school P.E., and fewer than one in four children get 20 minutes of vigorous activity every day. NikeGO PE features a standards-based, top quality P.E. curriculum, 2-day training and a custom equipment kit for fourth and fifth grade classroom teachers in schools where P.E. has either been eliminated or drastically reduced. Through the NikeGO program, they have also helped develop and contribute to other programs, such as Head Start which helps bring exercise to children in the head start program, a positive coaching alliance program together with Stanford University to help parents and coaches deliver positive experiences in

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