On Nike, Knight and changes at the top: Power games

One of my sporting heroes(*), Nike co-founder Phil Knight, has announced his intention to retire as chairman of the Nike board. From humble beginnings (selling shoes from the back of a car), Knight grew what can best be described as a sporting goods empire. Now, Knight wants Nike President and CEO Mark Parker to succeed him as chairman. Is this a good thing? Clearly, Knight has been instrumental to the company's success to date. But what of the future?

• The demands of running a successful company are quite different from chairing a strong and effective board of directors. Will Parker make the transition effectively?
  
• Knight wants his man, Parker, to become chairman. While any person has the right to make suggestions, this level of influence (Knight is effectively anointing his successor) suggests an inordinate level of power and control in bound in one man. What do the other directors think? Do the other shareholders have a view?
• More generally, if one man holds sufficient power to 'make the calls', is the Nike board an effective decision-making body, or is it simply a puppet?

The appointment of a new chief executive to succeed a successful founder is a complex challenge. The question of whether Parker will remain President and CEO if and when he becomes the chairman is unknown. To vest that much power in one person is a huge call. Another factor is whether the successor measures up (we could be about to witness another Microsoft–Ballmer scenario). The alternative—an external appointment—is not without risks either (remember John Sculley's time at Apple?). Whether Parker is the best man for the job or whether the long-term interests of the company and shareholders would be better served by an outside appointment remains to be seen. Whichever way the future of Nike unfolds, the story is likely to  be intriguing and, as a result, provide fodder for scholars of board practice and organisation behaviour to refine their ideas about leadership, corporate governance and value creation.

(*) The first pair of running shoes I ever owned were emblazoned with the now famous swoosh. My track coach convinced me that my 1500m times would drop if I ran in shoes. I was living in the USA at the time (circa 1979), and the Nike revolution was just getting underway, so I bought two pairs—one to train in and one to race in. Both pairs of shoes were great: they looked good and I felt great wearing them. And my times? Let just say all of my PBs and best race results (on grass, cinder and Olympic-grade tracks) were achieved in bare feet!