2. 1 Nike Corporation Jumping the Hurdles of Social Responsibility Disclosure

3. 2 Background Nike is the biggest manufacturer of sportswear in the world, and employs almost 1 million people. Nike outsourcing contracts 500 factories in 45 countries.

4. 3 Accusations In 1996, Nike was accused of labor violations and human rights abuses in foreign countries.

5. 4 Nike’s Response Nike responded with Labor Codes Personal Letters Campus Visits Newspaper Releases

6. 5 Litigation Marc Kasky, a San Francisco resident, sued Nike for false advertising, saying the statements were a marketing charade.

7. 6 Nike’s Response Nike said its speech was protected by the First Amendment. The company won the first trials, but lost in the California Supreme Court. Nike successfully appealed to the US Supreme Court.

8. 7 Consequences If Nike were to lose on the grounds of false advertising, companies everywhere would be liable for almost any public statement, muzzling corporations. If Nike were to win on the grounds of First Amendment protection, companies would be legally empowered to mislead consumers.

9. 8 Supreme Court Decision The US Supreme Court decided 5-3 to postpone ruling on Nike vs. Kasky. Groups on both sides complained about the decision, having hoped for a solution.

10. 9 Charity Settlement Nike made a charity settlement, giving $1.5 million to the Fair Labor Association. Groups on both sides of the issue complained about the settlement.

11. 10 Ethical Considerations Product advertising ethics are more lenient than responsibility advertising ethics. Was Nike ethical in the way it promoted its responsibility campaign? What methods of communication should companies use to promote social responsibility?

12. 11 Corporate Social Responsibility Statements: A Possible Solution CSR Statements would require companies to report labor and environmental information like the financial information in balance sheets.

13. 12 CSR Reporting CSR Information is widely sought and used: Investors screen companies for violations Consumers more loyal to responsible companies CSR information improves corporate image Companies are more likely to improve if information is disclosed

14. 13 CSR Reporting CSR reporting would remove legal ambiguity from companies seeking to improve transparency.