Approach

Our Board of Directors sets the tone at the top, demonstrating and emphasizing openness, honesty, fairness and integrity in the boardroom and across the company.

To strengthen our corporate governance, we have taken the following actions:

• Adopting Corporate Governance Guidelines that establish a common set of expectations to assist the Board and its Committees in performing their duties, reviewing these Guidelines at least annually and updating the Guidelines as appropriate to reflect changing regulatory requirements, evolving best practices and input from our shareholders and other stakeholders;
• Adopting our Global Code of Conduct and overseeing compliance, including ensuring corporate culture is on the Board agenda;
• Holding regular executive sessions between the Audit Committee and our Global Chief Compliance & Ethics Officer;
• Establishing a means for employees to raise issues to the Board and encouraging a culture of trust so that employees at every level feel comfortable speaking up about concerns; and
• Fostering a corporate culture of integrity and risk awareness through the Board’s oversight over PepsiCo’s integrated risk management framework, which includes the Board’s review of specific high-priority risks on a regular basis throughout the year.

Evaluating and supporting Board skills and competencies 

Our Board of Directors has a comprehensive, ongoing director succession planning process designed to provide for a highly independent, well-qualified Board, with the experience and background needed to be effective and to provide strong oversight. The Board regularly evaluates its composition, assessing individual directors’ skills, qualifications, attributes and experiences to ensure the overall Board composition is aligned with the needs of PepsiCo’s long-term business strategy. For example, each year, the Board assesses the directors to be nominated at the Annual Meeting of Shareholders.

PepsiCo has an extensive orientation program for all new directors as well as additional training when a director assumes a leadership role. Furthermore, PepsiCo’s Corporate Governance Guidelines require the members of the Board to continually educate themselves with respect to topics related to PepsiCo’s business, including international markets, accounting and finance, leadership, risk assessment, industry practices, general management, sustainability and strategic planning. This continued education assists directors in enhancing their skills and knowledge to better perform their duties and to recognize, and deal appropriately with, issues that may arise.

Risk Management

The Board recognizes that the achievement of our strategic and operating objectives involves risks, many of which evolve over time. The Board has oversight responsibility for PepsiCo’s integrated risk management framework, which is designed to identify, assess, prioritize, address, manage, monitor and communicate these risks across the Company’s operations, and to foster a corporate culture of integrity and risk awareness. Consistent with this approach, one of the Board’s primary responsibilities is overseeing and interacting with senior management with respect to key aspects of the Company’s business, including risk assessment and risk mitigation concerning the Company’s top risks.

The Board receives and provides feedback on regular updates from management regarding the Company’s top risks, including updates from members of management responsible for overseeing impacted areas, governance processes associated with managing these risks, the status of projects to strengthen the Company’s risk mitigation efforts and recent incidents impacting the industry and threat landscape. In evaluating top risks, the Board and management consider short-, medium- and long-term potential impacts on the Company’s business, financial condition and results of operations, including looking at the internal and external environment when evaluating risks, risk amplifiers and emerging trends, and considering the risk horizon as part of prioritizing the Company’s risk mitigation efforts.

The Board has tasked designated Committees of the Board with oversight of certain categories of risk management, and the Committees report to the Board regularly on these matters. For example, the Sustainability and Public Policy Committee assists the Board in its oversight of the Company’s policies, programs and risks that concern key sustainability, inclusion and public policy matters.

PepsiCo’s Risk Management Office manages its overall risk management process, provides ongoing guidance, tools and analytical support to the PepsiCo Risk Committee and business/function risk committees, identifies and assesses potential risks and facilitates ongoing communication between the parties involved, as well as with PepsiCo’s Board of Directors and other Committees of the Board.

Learn more about our corporate governance practices, including our policies and Global Code of Conduct, on PepsiCo’s Corporate Governance and Global Code of Conduct pages and in our most recent Proxy Statement. For more information about the governance of ESG topics, see Sustainability governance.