David Yawman, General Counsel, PepsiCo, Inc

After nearly 20 years at PepsiCo, Inc, David Yawman was promoted to general counsel. He shares his perspective on the pros and cons of taking on the top job after an extended internal tenure.

I started out at a big Wall Street firm. I received excellent training, and worked on different matters for different clients, but I aspired more than anything to work for one single client.

I was just a fourth-year associate when I transferred into PepsiCo, which was nearly 20 years ago – so I’ve essentially had a career within a company. When I joined, the law department had a reputation for insourcing as much of the work as possible, and that was critical to me because I needed to continue to learn.

That’s really been my story for nearly 20 years – PepsiCo is a place where if you do your current job really well, we will let you do something different, even if you don’t theoretically have the experience from a subject matter perspective. I’ve had the opportunity to do a lot of different things internally that I don’t think I ever would have gotten if I had gone to the open market. So it’s been a good learning environment for me, and it’s in the DNA and the culture of PepsiCo to allow that to happen.

I’ve had the benefit of being at the company for a long time, so I think I have a good understanding of the business, the organization, the risk profile and the risk tolerance. But in taking the role of general counsel, the biggest learning curve for me was the necessity to really lift my perspective from any one particular part of the company, to an overall perspective – a broader view. The decisions that I’m involved in now definitely impact different parts of the company, and making sure that I understand and appreciate the multifactorial element of any one decision across the global business is really important.

Currently, I oversee the company’s worldwide compliance and ethics, public policy and government affairs, and legal functions. I often find myself cross-checking what impact there may be in any one of those departments, even when the issue doesn’t squarely fit within that particular department, in order to ensure that I’m not missing a potential impact of a decision made in one part of the company on another part of the company.

It’s hard for me to concede that anybody would be prepared, on day one, to handle all the various aspects of my role. No matter what background anybody would have, there’s going to be learning that would have to happen after you get into the role. I’m biased, but the benefit of having worked at PepsiCo for so long has meant not having to learn so much about the business, which can be very difficult to get to by itself. My time is very much pulled into matters that are global in nature, rather than the detailed parts of the business, but fortunately I have been able to learn the business from the ground up.

I do think that legal services, at the most critical moment, is a judgement-oriented deal.

I would love to be able to tell you about some Thomas Edison-like moments during my first 100 days in the job in which I have innovated and invented something that’s new and novel! I can’t say that I’ve done that. But what I would say, having practiced law for 25 years, is that there’s been ongoing, continuous improvement. You’re constantly finding ways to do things a little faster, a little quicker, a little bit more insightfully. Certainly the sharing of information and the storing of knowledge is an important part of what we do, and the things that we’ve invested in within the legal team are really around information preservation, as well as enabling more efficient flow of work.

Thinking about the evolution of legal services, I’m not sure that there’s some big cliff or huge step upwards, whether in-house or in private practice. I certainly anticipate that efficiency models will continue to come to bear. For example, possible technologies that are rooted in artificial intelligence, or that are driven to figure out how big volumes of work can be carried out more cost-effectively, or even some predictive models around the magnitude of risks in the litigation environment. I anticipate people will get faster doing what they do and there will be attempts to be more predictive about trying to quantify risks. But I do think that legal services, at the most critical moment, is a judgement-oriented deal. My mind doesn’t go to innovation or models that will ultimately provide answers, my mind goes to models that will help provide information that ultimately will inform the judgement that lawyers have always historically had to bring to bear.

The role of my team is to mitigate risk for the company. When you get into mitigating risk from a business leader’s perspective, that means doing something different or allocating money, time or resources. A lot of times, lawyers are very good at highlighting the risk, and saying that it’s a ‘big risk’ or that it’s a ‘material risk’, but I think in order for us to really effectively influence, assist and counsel our business clients, we actually have to be willing – and a little bit more evolved in our ability – to put a value on that risk, so that a business leader can ultimately weigh it against the value of the resources, time or energy that he or she might have to place in order to mitigate that risk. I push our lawyers here internally to be innovative in their ways of thinking about risk and how to put a value on that risk, which really is at the core of helping advise our business around making actionable decisions.

Frankly, a lot of the best moments for me are successes that are unseen – knowing that we helped advise or guide the business client to avoid a risk, so that the risk never manifested. In some ways, those are instances of secret successes that make a difference.

General counsel ultimately have to become masters of different vectors of influence.

The general counsel is certainly one of the go-to counselors for the CEO and the board, but it’s not just on the law, it’s on a whole broader series of topics – whether it’s ethics, public policy, corporate citizenship, even geopolitical risks. It’s the wearing of these multiple hats that has really evolved over the past decade – going from just being a legal adviser to being an ethical watchdog, dealing with rule of law matters in developing markets and ultimately being involved in protecting the corporate reputation. At its core, there’s still a fiduciary duty that the general counsel has to the shareholders, but the role has certainly broadened. Candidly, I almost view the title of general counsel as being unduly narrow as a description of the full role.

General counsel ultimately have to become masters of different vectors of influence. When I look to the north, I see a CEO and a board and the shareholders, and I have to influence them on the things that matter most to them. When I look to the south, I lead multiple functions, and I’ve got to ensure that there’s the right talent and skills and that I can grow the team individually as well as overall. To the west, I see my peers, and whether it’s head of human resources or the chief financial officer, I need to be able to understand their perspectives on things in order to collaborate. To the east, I see a lot of external parties, from government officials, to NGOs, to competitors and industry groups that I also have to engage.

In the past, some individuals would be good at one of those vectors and maybe two, maybe three. But now, I don’t think there’s any one of those vectors against which the general counsel can afford to be ineffective.

One’s ability to influence is rooted in having substantive subject matter competence as well as personal character – which means that you are trustworthy, and you live by a certain level of principles. Across each one of those vectors, I need to be substantively competent in the issues that any one of those groups cares about. And then I need to be good at the point of contact, just as a personal proposition: I have the character, my word is good, I carry through on my commitment with truth and honesty. And then you’ve just got to ultimately work hard and be humble enough to learn from and listen to everyone you come into contact with. Hopefully, over the course of time, with some intentionality about learning across each one of those groups, you develop both that sense of character and competence.