Ford Foundation Chief, Advocate for the Poor, Rattles His Colleagues by Joining Board of Pepsi

Sunday, October 30, 2016
Darren Walker (photo: Getty Images)

 

By David Gelles, New York Times

 

With a compelling personal narrative and a track record of helping the needy, Darren Walker, the president of the Ford Foundation, has emerged as a prominent voice of morality.

 

In speeches and writings, Walker quotes civil rights leaders and employs soaring rhetoric to call for a more just and equitable society. Since being appointed to his Ford Foundation post in 2013, he has directed much of the foundation’s ample resources to combating inequality in its many forms — from unequal access to government to unfair treatment of women.

 

So it seemed discordant to some critics when, this month, Walker joined the board of PepsiCo. Pepsi, after all, makes the bulk of its money by selling sugary drinks and fatty snacks. What’s more, there is a well-established link between obesity and economic inequality. His new Pepsi connection raised the question: Would Walker’s day job and his new board duties be working at cross-purposes?

 

“For Darren, who’s making his case as a reformer, making the case of real change, I don’t know why he’d do this,” said Michael Edwards, a former Ford Foundation executive who now writes about philanthropy. “There’s a risk that he will be viewed as inconsistent.”

 

Pepsi, it may be argued, isn’t an inherently bad company. In addition to soda and chips, Pepsi makes Quaker Oats oatmeal and Tropicana orange juice. Its chief executive, Indra Nooyi, acknowledges that consumer preferences are changing and is trying to introduce healthier products.

 

Yet Pepsi also has a long history of dubious behavior. The company has lobbied against public health legislation, funded efforts to play down the obesity epidemic, sourced palm oil from conflict zones and been accused of engaging in deceptive marketing practices.

 

“They are saying they want these problems solved while at the same time lobbying against public health legislation that would help solve these problems,” said Michael Siegel, a professor at the Boston University School of Public Health and a co-writer of a recent paper on the soda industry. “It’s exactly the same thing the tobacco companies did. It’s exactly the same thing the alcohol companies are doing.”

 

As Pepsi’s newest board member, Walker is accountable for all that Pepsi is doing — for its noble efforts to promote health but also for its more tawdry activities. There does not appear to be a direct conflict of interest for Walker: The Ford Foundation, which provides about $500 million in grants annually, has not funded organizations working specifically to combat obesity or diabetes. But Walker acknowledged that colleagues have expressed skepticism about his work with Pepsi and said he was sensitive to the optics.

 

“I know that my own credibility and the credibility of the Ford Foundation is tied to this decision,” Walker said in an interview. “Those of us in philanthropy have to be discerning about the corporate boards we join and be discriminating to ensure that our service on a board is aligned with our values.”

 

Born in a charity hospital in Louisiana and raised by a single mother in East Texas, Walker grew up gay in the Deep South. He became a lawyer and trader in Manhattan but, dissatisfied with Wall Street, he walked away from it and devoted himself to bettering the lives of poor blacks in Harlem before starting to work for big foundations.

 

Walker said that as a Pepsi director, he planned to be as righteous in the corporate boardroom as he said he tries to be in his Ford Foundation office.

 

“I will bring my perspective as the leader of a social justice organization,” he said. “I will bring my perspective as someone who is deeply concerned about the welfare of people in poor and vulnerable communities.”

 

Nooyi echoed these aspirations and said she sought out Walker precisely because of his reputation for speaking his mind.

 

“He’s outspoken, he’s global, and he feels all these issues rather than just gives them lip service,” she said. “We want people who give us trouble and ask tough questions. I saw in Darren someone who would hold us accountable.”

 

Walker is hardly the first foundation president to serve on a corporate board. Judith Rodin, president of the Rockefeller Foundation, sits on the boards of Citigroup, Comcast and a for-profit education company, Laureate Education. The chief executive of the Bill & Melinda Gates Foundation, Sue Desmond-Hellmann, is on the board of Facebook. Previous leaders of the Ford Foundation have also served as corporate directors, including for Pepsi.

 

These are lucrative posts. Pepsi directors make between $275,000 and $418,000 a year. (The Ford Foundation paid Walker $789,000 last year.)

 

Some critics contend that such arrangements are simply ways for companies to neutralize potential detractors. “The best tactic is to bring your critics into the fold,” Edwards said. “It’s a great way of managing your reputation and softening your image.”

 

Walker disputed this notion. “I can assure you that I am not there for window dressing,” he said.

 

And Nooyi said that at Walker’s first board meeting this month, he already had an impact. As she briefed the directors on plans to expand into an African country (she wouldn’t say which one), she said Walker pushed her to emphasize a nutritious product lineup, rather than sugary beverages.

 

“He was not shy and he gave us his point of view,” Nooyi said. “He’s a very principled person, and my goal in having Darren on the board is that he’ll make us a better company.”

 

Nooyi says she is trying to make Pepsi a better company. This month, Pepsi pledged to further reduce the amount of sugar, fat and salt in its products by 2025. She is also working to reduce the company’s environmental impact, improve conditions for workers and use Pepsi’s heft to support various health and social welfare initiatives.

 

But as hard as she and her directors may try to instill high-minded values throughout the company, Pepsi is still a for-profit corporation with a quarter of a million employees working to sell more sugary, fatty snacks. At such a sprawling operation, some unsavory activity seems inevitable.

 

“This is the way corporations operate,” said Siegel of Boston University. “Pepsi is not in the business of public health; they’re in the business of selling soda.”

 

Walker made no apologies for Pepsi’s transgressions in the past. “I can’t speak for or answer for what happened at Pepsi before I got there,” he said.

 

Instead, he said he wants to help Nooyi shape a company that sells fewer unhealthy snacks and that does more to improve the well-being and welfare of its customers.

 

“As I join the board, what I’m comfortable with is the long-term vision,” Walker said. “I’m looking forward to helping this company transform itself.”

 

Already, there are signs of transformation. A longtime fan of Diet Coke, Walker said his preferences had recently changed.

 

“My favorite product is Diet Pepsi,” he said at a Manhattan diner as he ate breakfast. “I am, as we speak, consuming Quaker Oats oatmeal.”

 

To Learn More:

Federal Judge Gives Go-Ahead to Class Action Lawsuit against Pepsi for Exceeding California Carcinogenic Substance Limit (by Noel Brinkerhoff and Danny Biederman, AllGov)

Pepsi and FedEx among Hundreds of Companies Using Luxembourg to Avoid Taxes (by Noel Brinkerhoff and Steve Straehley, AllGov)

Save the Children Switches from Soda Tax to Coke and Pepsi (by Noel Brinkerhoff, AllGov)

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