Paul Boykas, Vice President Global Public Policy, PepsiCo, is the lead contact to external stakeholders who interact with the company on issues and works closely with the leaders of PepsiCo’s three sustainability planks.
GlobeScan co-CEO Chris Coulter recently interviewed Paul to gain insight on the value PepsiCo puts on stakeholder intelligence to help build recognized leadership in an uncertain world.
Business leaders and experts emphasize that the world in which business operates becomes more volatile, uncertain, complex, and ambiguous. What are the driving forces behind this shift?
Furthermore, people have a lot less trust in institutions and are relying on information from different sources in different situations. People are more knowledgeable today and have opinions on new issues than they didn’t have before, adding to complexity. In fact, there are many more voices that want to contribute now to public policy discussions. We see this with government and business, but also with non-governmental organizations, even smaller ones.
What does business need to do to be successful in this context?
For businesses to succeed in this context, we must engage. Stakeholder engagement, listening to where people are coming from and reacting appropriately, is critical in this new era. This doesn’t mean that what a stakeholder says is always right, but there are often opportunities to move forward together in many situations. In fact, this type of stakeholder engagement and listening is critical for all institutions, not just business.
What role can leadership play in this context? How is it defined internally?
As far as leading, we have felt that this is very critical for a number of years since our Chairman and CEO, Indra Nooyi, developed Performance with Purpose. Leadership has to be built into the system and must include having multiple inputs from, and touch points with, external stakeholders to bring it to life. In addition to listening and dialogue with stakeholders, it is important to have an integrated operating model that includes all key elements – social and environmental commitments, public policy, operations, etc.
Now, the truth is that this is really hard. It is difficult to ensure that this type of leadership is fully integrated and there are competing demands, financial demands, and limited resources. It is very time consuming and requires a lot of patience. In businesses that are dynamic and want to move ahead, it isn’t second nature. In the end, however, there is no question that it is worthwhile and that this helps manage risks and identify new opportunities.
Can you think of an example for PepsiCo where this has played out?
An example of valuable engagement for PepsiCo would be working with shareholders such as the Interfaith Council on Corporate Responsibility (ICCR). Nearly a decade ago, there was trust issue with ICCR around genetically modified corn and we didn’t have a systematic approach for us to communicate on our approach. So, over the years we have worked hard to rebuild trust, increase dialogue and listen more deeply to shareholders and stakeholders. As a result, we now have, I think it is safe to say, mutual respect between our two organizations. We talk on a regular basis and this informs our thinking in a range of new issues and challenges that the ICCR is focused on, and helps us keep ahead of challenges that affect our business.
To what extent does having a strong corporate purpose contribute to leadership?
Corporate purpose is totally relevant to leadership. Large corporations these days – whether recruiting new talent, engaging customers and civil society, or talking with government – you have to engage in corporate purpose discussions. While products are critical, the fact of the matter is that people need to understand the role of the corporation and what it is trying to achieve.
Thinking about stakeholders, how much are their expectations for business changing?
I am surprised at the amount of collaboration that began when I started in this role about 8 years ago. Today, I believe there are higher expectations from stakeholders and sometimes more aggressive feedback, likely out of frustration for critical issues not being addressed fast enough. I think this relates to the growing expectations on global companies.But we need to remember that this isn’t only about business. We also need leadership from government to make progress. Business has a role and we have to play it, but we don’t and shouldn’t have the level of influence to force governments to change solely based on our wishes.
How can companies create more value from stakeholder engagement?
If we can set up the right mechanisms, to have an ongoing dialogue with stakeholders rather than one-offs, then it is indispensible. More than that, with a systemic approach it becomes standard operating procedure.
Often, however, you have to make the business case and like any business case, some people get it and others don’t see the value as clearly – and there are opportunity costs for personnel in companies to spend time on stakeholder engagement versus other priorities. This is especially true when there are so many siloed priorities and issues: deforestation, nutrition, land rights, climate change, etc. You have to focus on with the strategic and material issues and address them in a comprehensive and evolving manner. This is not an easy thing to do, and there can be frustration within businesses as the conversation and issues agenda keep changing. I think we do need better tools when it comes to stakeholder engagement, including best practice examples and how we can assess the value of these to the business.
