Dive Brief:

• Nike Inc. CEO Mark Parker issued a mea culpa to employees on Thursday during an all-employee meeting at its Beaverton, OR headquarters, MarketWatch reports. His apology was to people who felt excluded from the company's culture and had nowhere to turn, according to the report.
• Such all-hands meetings are rare for the athletic wear giant, according to the report, and comes as the company has been buffeted by reports of a widespread "boys club" culture in its top ranks that included human resources rebuffing women who attempted to report inappropriate actions by their male colleagues and bosses.
• The company last week promoted Amy Montagne to vice president and general manager of global categories and Kellie Leonard to chief diversity and inclusion officer; both women replaced executives who left the company amid an exodus of male employees resulting from accusations.

Dive Insight:

Nike faces a high level of scrutiny as it attempts to realign its reportedly toxic culture in the wake of a wave of negative press coverage and high-profile executive departures. ​

Initially, press reports seemed to indicate that Nike was acting swiftly in showing a few male executives the door amid unspecified accusations of inappropriate conduct — until the New York Times published a story detailing how problems had long been ignored and how women making complaints were boxed out by the very human resources department putatively in charge of dealing with such issues. Several women left the company in recent years, though a few who stayed conducted a survey to demonstrate to Parker the depth of the problem, according to the Times.

At this point, that makes Parker’s apology and even the new female hires the bare minimum of what needs to be an even more forceful effort, according to Mark Lipton, professor of management at The New School and author of Mean Men, The Perversion of America’s Self-Made Man. Recent reports highlight how long the problem festered, he said.

It's an issue of trust that isn't easily rebuilt, Lipton warned, and it's a potential problem for Parker and Nike that the actions being taken now are coming on the heels of press coverage. "It can reek of hypocrisy and the naiveté of a quick fix," he said.

It can be fixed, however — though that will take further, consistent action, the elevation of the HR functions and more big statements from Parker like his talk on Friday, according to Lipton. The cascade of negative press coverage and toxic culture allegations also calls into question what Nike's HR department was doing until recently, Lipton said, and highlights the critical role HR will have to play in addressing the company's current challenges. 

“Parker needs to prove he supports [Monique Matheson Nike's EVP, Global Human Resources], that she's up for the role, and give her the power to co-lead a culture change initiative along with him. They need each other,” Lipton said.

Nike’s troubles are coming at a moment when the company, like rivals, is hoping to sell more apparel and footwear to women, who are stoking sales in its categories. That doesn't mean its apology should be extended to customers, though, according to Lipton. In fact, that's a muddy marketing message, at a time when clear action is needed. Taking meaningful steps to right wrongs will speak for itself if the company focuses on employees and company culture, he said. "Once you change the culture, it will sell itself."

Still, executives and boards at other companies should be paying close attention and taking action now where required, Lipton said, noting that “bro culture” is not just a Nike problem. Investors, too, may be taking note and considering whether they are tied to companies with similar problems.