‘Doing the right thing is also the right thing for the business.’ That’s how Cynthia Nastanski, senior vice president of corporate law and deputy corporate secretary with PepsiCo, describes her firm’s approach to governance. This commitment and a string of initiatives designed to boost the firm’s governance capabilities and performance are why this year’s governance team of the year (large cap) award goes to PepsiCo.
Over the awards review period, the team’s achievements include the formation of a new public policy and sustainability committee, which was created in early 2017 to help the overall board with its oversight and pursuit of the company’s new ‘Performance with Purpose’ agenda. The governance team worked with the company’s office of sustainability, senior leadership and board to draft the new committee’s charter and framework.
The company launched Performance with Purpose in 2006. In October 2016 it relaunched the initiative, focusing on ‘creating a healthier relationship between people and food’ and including specific goals to achieve by 2025. These include that at least two thirds of its global beverage portfolio volume will have 100 calories or fewer from added sugars per 12-oz serving.
The governance team has also been instrumental in supporting and expanding PepsiCo’s shareholder engagement efforts, which now include regular outreach to the company’s top 75 shareholders, as well as other important shareholders and stakeholders. The engagement program involves members of PepsiCo’s legal, public policy and government affairs, communications, compliance and ethics, executive compensation and investor relations teams. ‘We approach [engagement] from many different levels and parts of the firm, which makes us unique,’ Nastanski says.
The program also includes off-season engagement, which is rapidly becoming a governance best practice. Over the review period, this involved discussing the Performance with Purpose goals and new public policy and sustainability committee, in addition to other corporate governance and compensation issues.
‘PepsiCo’s governance team has played a critical role in setting the tone, developing the policies and exhibiting the ethical business behavior required to ensure that all PepsiCo directors, executives and employees understand, accept and actively execute on their individual responsibility for contributing to performance that is both ethical and sustainable,’ an external nomination states. ‘Its culture and practices have also enabled PepsiCo to be at the frontier of sustainability.’
Among other achievements, the team enhanced the firm’s disclosure of sustainability progress by issuing an updated sustainability report. It used feedback from working with a Ceres initiative and from the company’s shareholders to inform the report, and combined it with the Global Reporting Initiative report to have all the information in the same place, according to Nastanski. The team also updated the annual training on PepsiCo’s global code of conduct by adding real-life business examples.
This article originally appeared in the Winter issue of Corporate Secretary.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
