In this video I would like to use Nike as an example to illustrate how companies can institutionalize their commitment towards corporate social responsibility through the change of corporate governance. First, I would like to give you some background about this company. So, Nike is the largest athletic footwear and apparel company. It can be traced back to 1964 when Bill Bowerman and Phil Knight founded a business to sell shoes that are manufactured in some low-cost markets. So, in the 1980s, Nike was listed on Nasdaq with their two-class share structure under which the chairman and CEO Phil Knight owns 42 percent of this company. So in the 1990s, the company faced a huge problem because of many criticisms over the company's labor issues and contract factories in some emerging markets. As the criticisms heated up, the founder and board chairman, Knight, realized the importance of the problem, so he turned to Jill Ker Conway for help. Conway is the first female director on Nike’s board. She was the former president of Smith College. The reason she was invited to Nike’s board is because of her expertise in women's issues and her understanding of students’ perspectives. So, to understand the situation faced by Nike, Conway visited some contract factories in South East Asia. She and her colleagues developed some partnership to conduct tens of thousands of interviews in the contract factories to engage the board of directors in corporate social responsibility issues. Conway proposed to establish a board level corporate responsibility committee. So, the board chairman Knight endorsed this idea and asked Conway to chair this committee. She accepted this offer on the condition that Knight must attend every meeting. So after this committee is established, the committee members have multiple responsibilities. First, they need to oversee the public reportings on corporate responsibility and sustainability issues. They need to oversee whether the company achieves their sustainability targets. In addition, they try to come up with innovative solutions to make the manufacturing process safer and innovative. The corporate responsibility committee has interactions with other committees and directors to have the full board understand corporate social responsibility issues. As time goes by, this committee is getting more and more involved in the core functions of the company, as top executives are expected to report, to meet with the committee, explaining how their business strategies are integrated and aligned with Nike’s sustainability strategy. So in an interview of Conway, she was asked what makes this corporate responsibility committee successful? She shared that an important key to success is board room culture. With a learning culture, the executives and directors are willing to share their ideas, suggestions, and they are passionate for innovation. With efforts of the board of directors, executives, employees and other stakeholders, Nike has successfully transformed into a pioneer in using CSR issues as a catalyst for innovation. Then what can we learn from this case? First, establishing a board level corporate responsibility committee is a good practice to engage the board of directors in CSR issues. Second, it may not be enough to establish a committee alone. It is important to have support from shareholders and executives to make sure that this committee is not isolated and really functions. In addition to board level corporate responsibility committees, actually there are other governance practices and mechanisms that can be used to integrate CSR issues in managerial decision making. For example, companies may invite directors representing a different stakeholder group or stakeholders’ interests. And also, companies can build a linkage between executive compensation and social and environmental metrics so that executives have incentives to make decisions and to consider CSR issues when making decisions. So the key message for this video is that corporate governance plays an important role in translating discussions of CSRs into serious changes in firm decision-making.