NIKE BOARD APPOINTMENT IRKS UNIVERSITY OF WASHINGTON FACULTY

Puget Sound Business Journal (Seattle) - Portland, Ore. Business Journal
Tuesday, January 5, 2010

An organization of professors at the University of Washington has asked Provost Phyllis Wise to step down from her recent appointment to Nike Inc.’s board of directors.

In a statement issued Monday, the Seattle university’s chapter of the American Association of University Professors said Wise’s position on the Nike board is rife with conflicts of interest.

“I understand that reasonable people hold differing views on whether university administrators should serve on corporate boards,” Wise said in a statement published Tuesday by The Seattle Times. “I believe universities and corporations have much to learn from each other. Corporate leaders serving on university boards of trustees and regents and university leaders serving on corporate boards can benefit both and can do so in ethically responsible ways.”

The faculty cited several conflicts of interest, including the Beaverton, Ore.-based sportswear company’s (NYSE: NKE) $35 million deal to outfit the university’s athletic department.

But they seem more riled about the direct association between the university’s second-in-command and a corporation tied to claims of unfair labor practices.

A university committee on trademarks and licensing recently voted that Nike was in violation of the university’s code of conduct. The committee said Nike failed to take effective action after two contractors in Honduras closed factories a year ago without paying workers after they unionized.

Nike issued a statement Tuesday saying the contractors, VisionTex and Hugger, were forced to close due to insolvency. Regardless, the company said it has been working to resolve the issue regarding severance for the employees.

“Nike believes that factories which directly employ workers are responsible for ensuring that their employees receive their correct entitlements,” the company said.

Nike announced Wise’s board appointment in November. Nike Chairman Phil Knight at the time said her experience as a respected leader and administrator of a multibillion-dollar budget “is a rare combination that makes her an ideal addition to our board.”

The faculty also stated concerns about academic freedom on a campus where students and faculty have openly criticized Nike’s labor practices.

“It may not be Provost Wise’s intention to silence criticism from labor rights experts. But when faculty report to a provost who is on Nike’s payroll, institutional incentives favor tolerance for sweatshop abuses,” the faculty wrote. “This is not in the best interests of academic freedom nor of the university.”