What is going on at Nike? The governance perspective

What is going on at Nike? The global sports clothing giant is back in the news again because it can’t seem to shake some core governance headaches.

The company is in the middle of a massive restructure of retail strategy, trying to fix ramifications of earlier pivots that hindsight hasn’t been kind to. But while that restructure might have previously filled shareholders with confidence, the current outlook is more mixed; things just aren’t happening fast enough.

Dominic Platt, finance chief of JD Sports – one of Nike’s biggest customers – isn’t bothered. He has said it’s “only a matter of time” before Nike’s fortunes change and that, as a big business, it would not turn around in a matter of months. 

It doesn’t change the fact that the company’s share price continues to fall (43% in 2026 alone and 76% across the last 5 years), which makes for an excellent case study in corporate governance. Where did it go wrong, and how might it come right again?

We have to go back to the pandemic to understand it fully. Worldwide lockdowns forced a major and sudden shift in sales strategy for Nike. Customers were suddenly unable to visit the wholesale partner stores that the company had forged such strong relationship with. 

Under former CEO John Donahoe, Nike pivoted to a direct-to-consumer model, giving consumers much greater power to buy their goods at the source, and focusing a lot on re-releases – the stuff they knew would sell. 

Governance-wise, there was a lot of sense in this strategy. In the context of the pandemic, it was a reflection of Nike’s ability to shift to match its market.

But the failure in that decision was Nike’s inability to think long-term. Difficult as it might have been at the time, its leaders also had the responsibility to do that, and they failed. “What happens when the pandemic is over?” is a question the board and executives should have given proper attention to. In the end, it was mostly bad news on that front. 

Nike exited the pandemic having burned many bridges with wholesale partners who, in the meantime, had given their shelf space to other companies, some of them new brands with growing popularity. Nike was left with poorer business relationships, few new products to sell and increased competition from other brands.

There are some major challenges:

• The company’s struggling share price
• It can’t get a break from increasing competition, especially in historically key markets like China. 
• The board’s track record, especially approving Donahoe’s dramatic strategy shift and failure to deal with the continuous decline since, has meant confidence in its abilities has been sliding for years. 
• That drop in confidence means a rise in pressure. 
• The company’s Nike’s board and executive suite face a triad of governance hurdles, all rooted in repairing the damage of the previous regime.

Eliott Hill was appointed CEO in October 2024, with promises of a huge turnaround. The reason Nike is back in the news as of September 2026 is that there’s increasing criticism that the turnaround isn’t happening fast enough. 

Dominic Platt’s (JD Sports) comments in support of Nike are a good PR win for Hill. It’s a major wholesale partner giving the company a vote of confidence after years of more strained relationships. However, words only go so far. Nike is also taking these steps to improve its fortunes in the years ahead.

Nike is going for the “premium” label. Current reports state that the company is planning to cut partnerships with wholesale retailers in China, so that customers will only be able to buy from its official website, thus restoring elements of brand luxury. 

To say the least, it’s a bold move. Wholesaler relationships are one of the factors behind Nike’s original governance crisis, and now it may be planning more of the same in China, where an expert has warned that it could cost a lot in the short term. 

However, in the context of trying to bring the brand’s premium image back, it may pay off; we’ll just need to wait a long time to find out. 

Hill has changed the hierarchy within Nike to reflect product type more specifically. Roughly 8,000 employees have been affected by this change. Instead of being assigned to generalised teams like “lifestyle”, they are being assigned to more specialised brackets based on sport (running, tennis, soccer, etc). 

This is a good governance move from an innovation standpoint. It puts the consumer at the heart of product planning. The internal disruption and potential employee fatigue with so much change will need to be watched, however.

One of the other reasons Nike has been back in the news in September 2026 is that it brought in a new non-executive/independent board member: LVMH executive Alexandre Arnault. 

Arnault has extensive brand experience, and Hill mentioned this specifically when announcing his arrival. 

Governance-wise, fresh independent perspectives are universally positive in times of corporate sluggishness, but the proof will be in the pudding in terms of how much Arnault can bring to the board’s control over the situation.

Short-term: no. Even those supportive of Nike’s restructuring are openly admitting that the turnaround will take longer, even if the governance decisions make total sense. Ultimately, Nike’s problems were years in the making, so they cannot be undone overnight or by the next AGM. 

Hill and the board will likely need to spend more time working on easing investor concerns as they move through the process. 

Longer-term, the outlook is better because the governance decisions do carry a lot of weight. However, the urge from investors to pivot towards short-term gains will not falter, so if there’s any movement towards appeasing those wishes, brand new strategic analysis will be required.