Shareholders Push Nike for Greater Disclosure on Political Spending

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Shareholders Push Nike for Greater Disclosure on Political Spending
Investors become concerned with the social issues as they pursue Nike to become more transparency in disclosing the political spending of the company. To achieve this, the investors placed a proposal to a vote seeking Nike to provide regular reports on their political contributions. However, as per the proxy statement, the company’s boards of directors recommend that the shareholders vote against the proposal since they claim the company’s policies and disclosures provide adequate information.
In my opinion, Nike acted unfairly to the shareholders’ by maintaining opaque policies that were a secret. Investors are very critical players in any company, and they deserve transparency as a way to understand how the company is utilizing their investments within the organizational operations. Moreover, Nike has an ethical requirement to disclose relevant information to their shareholders upon request. Also, the situation where Nike’s board members recommend that the shareholders vote against the proposal shows how the management breaches the ethical requirement. The management has an obligation to act on the best interest of the company’s shareholders and in this case, the investors. Therefore, although the proposal may threaten the competitive advantage of the company, I feel that the investors have the right to be given full disclosure of the company’s expenditures.
Furthermore, the fidelity aspect of the deontology approach suggests that an ethical action keeps the promises and fulfills the contractual agreement therein.

Based on this approach, Nike Company, through the board of directors, is breaching the ethical requirement by failing to act on the best interests of their shareholders. Besides, the shareholders have the right to vote on any issues that face the company without any significant influence from the Directors.
Link: https://blogs.wsj.com/riskandcompliance/2018/09/20/shareholders-push-nike-for-greater-disclosure-on-political-spending/