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John Driscoll, the CEO of a Connecticut-based health care firm, is used to stepping out ahead of his fellow CEOs. In May, the CareCentrix chief penned an op-ed in The Guardian about how he froze executive pay to fund raises for his lowest-paid employees. Back in 2017, he appeared in a Service Employees International Union-funded ad calling on Connecticut to raise taxes on corporations and wealthy taxpayers to close a $3.6 billion deficit.
In August he joined a group of multinational business leaders, calling themselves Business for Inclusive Growth, in delivering a pledge to French President Emmanuel Macron, who was then hosting the G7 summit in Biarritz, that they would ensure that the benefits of economic growth are more widely shared. The goals of the group are to create good jobs, combat child labor, and achieve gender pay equity.
Macron—who has been beset by Yellow Vest protesters angry about growing inequities in comparatively egalitarian France—made fighting inequality a focus at this year’s gathering of world leaders.
In an interview with Capital & Main, Driscoll acknowledged the cause for skepticism surrounding corporate social responsibility efforts, which critics on the left, including former U.S. Labor Secretary Robert Reich, have dubbed a “large scam.” But Driscoll stressed that in a capitalist economy businesses have a unique obligation to set workplace standards and to the communities they serve.
This interview has been edited for concision and clarity.
Capital & Main: Your pledge says that businesses can be “key allies in the fight against economic inequality.” Can they, when the primary mission of any business is to satisfy shareholders?
John Driscoll: If you’ve got the wrong values and you’re focused on the wrong time period, you’ll make the wrong decisions about squeezing too much [profit] for shareholders. A monomaniacal view of short-term shareholder return will destroy more companies than it will help.
C & M: Let me put this another way. Can we leave it up to businesses to fix business?
JD: No. My view is that business and government need to work together to create sustainable capitalism. Certainly there is a necessary role for government to regulate and to set the rules of the game around the environment, around transportation, [around] a whole series of things where you need rules to create foundational, fair and humane criteria for a business to succeed. But it’s a business’s role to then do the right thing for its employees and their communities in order to create sustainable success.
C & M: What do you say to skeptics who argue that these kinds of actions, including the ones that are highlighted by Businesses for Inclusive Growth, are symbolic? They are perhaps distractions.
JD: I think there’s way too much symbolism and not enough action. If you look at the way the middle class and entry-level employees have been squeezed over the last 30 years, skepticism would be warranted…. I think the track record is poor. But that doesn’t mean we shouldn’t change the talk track. Now let’s test how a business performs. I think both government and business need to do a better job of protecting employees, protecting communities and creating more opportunities for all of us.
C&M: You talked about the role of business and government. Do you think that rising inequality can be tackled without a stronger labor movement?
JD: If you look across the industrialized world, even where there have been strong union movements, you see a decline in [the share of] worker and middle-class wealth. I think we’ve got a big problem and [a weakened U.S. labor movement] might contribute to that, but I think it’s a more dramatic problem and we need to be working on a lot of solutions. I don’t think business will survive the way we have experienced it unless we spend less time focusing on Wall Street and more time focusing on our employees and our communities.
The businesses in Europe seem to be a little bit more dialed into the fact that they need to play a bigger role and be held accountable to change the arc of progress for workers and communities.
C & M: The Business Roundtable has released a statement claiming that 180-plus members want to focus on maximizing returns to shareholders and to take into account the broader concerns of communities, employees and the economy. I wonder what signs of a shift you think we should be looking for?
JD: [First], it’s frankly appalling that we don’t have more businesses paying above the federally mandated minimum wage. I can’t start attacking people. I’m not going to do that. But it’s indecent for companies to have hard-working employees that can’t afford to live on the wages they’re being paid while the companies are being successful. The rest of the industrialized world has proven that you can create a fair minimum wage that people can afford to live on…. [Second], are we making sure that employees can afford fair and affordable health-care benefits? And the third question would be, as companies succeed, are workers, employees, and communities succeeding?
C & M: You’re a CEO who’s done more than sign pledges. You froze executive pay so you could raise wages for your lowest-paid workers. Was that a business decision for you or an act of conscience?
JD: You sound like my confessor. I think all-important business decisions should be decisions of conscience as well as business. I can’t separate the two. For me, it a fundamental issue of fairness. I was uncomfortable demanding more of minimum wage employees, or of entry-level employees, that couldn’t afford to live on the wages we were paying them.
From a business perspective, you can’t expect employees to bring their whole selves to work if they are stressed on a regular basis about whether they can afford to live on the wages you’re paying. It was unacceptable to me as a leader to be running a business that was making a profit and not paying people enough to afford to live on the wages we were paying.
read more at https://www.fastcompany.com by Jessica Goodheart