Nike Inc. (NYSE: NKE) was under fire on Friday following an internal memo and a change in its senior executive management that may or may not be connected. The apparel manufacturer is finding itself under the sexual harassment microscope, but nothing has been deemed conclusive yet.
According to the memo, Nike management has become aware of reports of behavior occurring within its organization that does not reflect its core values of “inclusivity, respect, and empowerment.” In a sense, this is highlighting what many perceive as sexual harassment. And this comes at a strange time.
In the same memo, Nike announced a departure in its senior leadership, which seems fishy. Trevor Edwards, Nike Brand president, will retire from Nike in August. He will now serve as an advisor to Mark Parker until his retirement as Nike transitions its organization. According to a spokeswoman, there have been no direct allegations of misconduct against Edwards.
The memo detailed Nike’s plan going forward:
We are going to be doing a comprehensive review of our HR systems and practices along with elevating our complaint process for matters of respect issues. We will increase and invest more heavily in our diversity and inclusion teams and networks and additionally will immediately put in place an enhanced process to encourage our employees to speak up and make their voices heard.
The company also announced that Mark Parker will remain as board chair, president and chief executive officer beyond 2020, and Elliott Hill, former president of Nike Geographies, will take on the new role as president of Consumer and Marketplace. In this role, he will be responsible for Marketing, Geographies, Nike Direct and Global Sales. Michael Spillane will continue to lead all Categories, Design, Product and Merchandising. In the new structure, both Hill and Spillane will report directly to Mark Parker.
Where there’s smoke, there’s fire. But in this case there’s not enough information to go on and allegations may be easy to dismiss. It’s worth pointing out that Edwards seems to be leaving on a positive note, at least according to Parker:
I’d like to thank Trevor for the important role he has played for 25 years and for his significant contributions. He has helped us grow and strengthen our brand on a global scale. I am committed to stay in my role as Chairman, President and CEO beyond 2020. Trevor has decided to retire. We are fortunate to have a strong management team in place who is well suited to drive our next stage of growth and to steward and evolve our culture in the future.
Shares of Nike were last seen up slightly to $66.47, with a consensus analyst price target of $67.91 and a 52-week range of $50.35 to $70.25.