Nike CEO John Donahoe Addresses Hebert Reselling Scandal

In an internal meeting Monday, he said Nike needs to rebuild trust and double down on anti-bot measures. Another exec detailed Ann Hebert's exit from Nike.

Nike CEO John Donaho

Nike CEO John Donahoe. Image via Nike

Nike CEO John Donaho

Nike’s chief executive, John Donahoe, addressed the circumstances around the recent resignation of VP Ann Hebert in an internal all-hands meeting for the brand’s North America team on Monday. Her resignation came last week, just days after Bloomberg Businessweek published a story uncovering the sneaker resale business run by her 19-year-old son, Joe, raising questions of nepotism and unfairness around limited sneaker launches. During the virtual meeting, which Complex reviewed a recording of, the CEO spoke to the waning trust of Nike fans.

“There’s no value more core to who we are than the trust our consumers put into us and our brand and our products,” Donahoe said. “And the fact of the matter is, this incident has sparked questions in some of our consumers about whether they can trust us, particularly around launch product.”

Part of the way Nike plans to rectify this, the CEO said, is to do an audit of its launch process to ensure consumers have confidence in the way it releases limited-edition sneakers. These sneakers have been the targets of bots that seek to beat out regular customers for online drops.

“We’ve been working on anti-bot technology for the last several years,” Donahoe said. “That is part of the solution, but we need to double down our efforts.”

He explained that Nike plans to update its policies to make it clearer what is and isn’t appropriate for employees and their immediate family. This, Donahoe said, has become newly important because of the rise of sneaker resale markets globally.

Donahoe spoke during the all-hands meeting about bettering Nike’s compliance function in order to handle potential grey areas that arise for employees. The context of his comments places Hebert, whose name reportedly appeared on a credit card statement from her son Joe’s reselling business, in one of those grey areas.

Heidi O’Neill, Nike’s president of consumer and marketplace, also spoke during the call, explaining in new detail the events that led to Hebert’s resignation. She said that Nike’s legal and compliance teams conducted an internal review of the exec’s connection to her son’s business after receiving a media inquiry about it months ago. But according to O’Neill, who was Hebert’s manager before Hebert left the company, the review did not find that she’d broken any rules in her proximity to the resale business.

“Our internal review of the relationship between Ann and her son’s reseller business confirmed that she had not explicitly violated company policies,” O’Neill said.

O’Neill laid out the timeline from Hebert’s first disclosure to Nike about her son’s business in 2018, when he’d planned to start his resale company. She said that Hebert checked in with her then-manager (who is no longer at Nike) as the resale operation grew and intended to follow company policy, but did not continue to do so thoroughly enough.

“Ann should have continued to share updates, including informing me, as her new manager, and unfortunately she did not,” O’Neill said.

Nike’s president of consumer and marketplace referenced the turmoil the company’s employees have faced as the saga unraveled in the public eye over the past couple weeks. O’Neill spoke to the expressions of sadness, disappointment, and hurt she’d seen from employees. She said that Ann Hebert should have better considered the optics no matter the size of her son’s business.

“To be clear, we believe that Ann demonstrated poor judgment. However, we made the decision to not take corrective action against Ann,” O’Neill said, describing Nike leadership’s reaction to the internal review. “That decision was based on the information that we had at the time of the review. Following media reports, we had a more complete understanding than what we did when the review was conducted a few months ago and, together with Ann, we decided that it was best for her to resign.”