Governance team of the year (large cap) PepsiCo
Cynthia Nastanski, PepsiCo
PepsiCo is named governance team of the year (large cap) for the second year in a row, a testament to the consistently excellent work carried out across a range of areas from ESG reporting to the company’s proxy statement, shareholder engagement and compliance training. ‘We really care about corporate governance,’ says Cynthia Nastanski, senior vice president for corporate law and deputy corporate secretary at the firm.
PepsiCo is continually looking to enhance its proxy statement. ‘We view it as a great opportunity to communicate our strategy,’ Nastanski says. For its 2021 edition, the company responded to investor feedback by selecting six areas to showcase:
For example, PepsiCo enhanced its disclosures throughout the proxy statement to highlight that the board in 2020 changed the name of its public policy and sustainability committee to the sustainability, diversity and public policy committee. It also updated its charter to reflect the committee’s oversight of diversity and inclusion matters and to ensure such topics remain central to the business strategy.
In terms of human capital management, the proxy statement included a full-page graphic showing examples of steps the firm has taken to protect, attract and train employees and enhance diversity and inclusivity in its culture. Among other things, PepsiCo created a snapshot of the board for shareholders in the proxy statement by bringing together in one place all director statistics such as diversity, tenure and age, together with the board matrix of attributes and experiences.
Shareholder engagement PepsiCo was also short-listed for the shareholder engagement award category and its proxy statement includes a section dedicated to this work. It explains how PepsiCo seeks shareholder feedback throughout the year on topics such as portfolio strategy, financial and operating performance, capital allocation, sustainability strategy and initiatives, human capital management, corporate culture, diversity, governance and executive compensation.
The section also outlines recent examples of governance changes the company has made in response to shareholder feedback, including amending the public policy and sustainability committee’s name and charter, publishing global workforce demographics data, eliminating supermajority voting standards and decreasing from five to four the number of public company boards a non-executive director can serve on.
We really care about corporate governance
Assessing boards to help them operate effectively has taken on growing significance as investors pay greater attention to board performance and makeup. During the awards period, PepsiCo added to its written board and committee evaluations by carrying out individual director assessments facilitated by an outside party.
PepsiCo also wins this year’s best ESG reporting (large cap) award (see Cutting-edge disclosures on vital topics). Among the highlights of its work in this area were enhancements the company made to its ESG topics A-Z, a web-based resource that covers the broad range of sustainability-related topics that matter to the business and to key stakeholders.
In addition, PepsiCo in 2021 released an update highlighting its progress against the company’s racial equality commitments over the previous 12 months and published workplace demographics tracking progress against PepsiCo’s gender parity and managerial representation goals.
PepsiCo takes training seriously, too, and conducts an annual training and awareness campaign giving employees specific guidance on behavior expected under its code of conduct.
This is a major operation: in 2020, for example, more than 74,000 eligible employees completed an online training course – available in 23 languages – and certified their compliance with the code. More than 135,000 frontline employees also received training on the code through workshops or online via mobile devices.
