The best way to make CEOs focus on inequality in the workforce is for their shareholders to demand it, according to Nasdaq President and CEO Adena Friedman.
In a CNBC interview, Friedman said investors hold an “enormous amount of influence” when it comes how companies can tackle issues like social injustice and economic inequality.
“If I were to say what’s the number one way to make sure that I focus in the long-term on how to continue to make a positive difference for our community, our employees and the communities around us is having investors ask me about it every quarter,” she said.
The coronavirus pandemic has exposed already-wide inequalities in the workforce as millions of Americans, especially minorities and low-wage workers, have been put out of work.
Friedman explained how “cooperative capitalism,” which embraces partnerships between the private and public sectors, is a key to tackling economic disparities.
“I don’t believe that the answer is to try to have the government play the entire role,” she said.
Friedman urged firms to bring back equity ownership, a benefit that allows employees to own shares in their company. According to a March analysis by the Pew Research Center, roughly half of Americans are not invested in the stock market.
“If you do that [equity ownership] across all companies, then that spreads that opportunity for wealth creation to a much broader part of the population,” she said.
The coronavirus crisis has presented an opportunity for companies to find more flexible ways for employees to work and ultimately contribute to a better work-life balance, she added.
Friedman, who serves on the board of directors at the Federal Reserve Bank of New York, added that companies should not give up on globalization despite pressure to look inward during the crisis.
“It’s a shame if we really abandon the global ecosystem we’ve created because it has actually created jobs all over the world; it’s lifted a lot of economies around the world; it’s made us global citizens; and in many respects up until recently, I would say, it’s really allowed the world to operate in a more unified way,” she said.
