This CEO Thinks Noncompetes Hurt The Economy | Forbes

Summary

In this interview, Diane Brady speaks with Peter Gasner, founder and CEO of Viva Systems, a cloud software company supporting over a thousand life sciences companies in bringing medicines to market. Gasner discusses Viva's role as a Public Benefit Corporation (PBC), emphasizing the legal obligation to balance interests of employees, customers, and shareholders, rather than solely maximizing shareholder value. He highlights the PBC's impact on fostering long-term relationships and trust, which benefits all stakeholders, and his stance against non-compete agreements, advocating for a return to a more balanced and ethical business approach.

Takeaways

• 🌐 Viva Systems is a cloud software company that provides data and professional services to the life sciences industry, aiding in the development and distribution of medicines.
• 🛠️ Peter Gasner, the founder and CEO of Viva, explains that the company's mission is to help bring medicines to market and to the right patients, contributing to a healthier world.
• 📜 Viva became a Public Benefit Corporation (PBC), a status that legally requires the company to balance the interests of employees, customers, and shareholders, rather than solely maximizing shareholder value.
• 🔑 The PBC status is significant because it institutionalizes a commitment to stakeholder capitalism, making it a part of the company's legal charter and long-term strategy.
• 🚫 Viva does not have non-compete agreements, reflecting a belief in the mutual benefits of employer-employee relationships and the negative impact of non-competes on the economy.
• 💼 The company's stance on non-competes is also tied to its values, emphasizing the importance of allowing employees to pursue their passions freely after their employment ends.
• 🌟 Viva's approach to business is geared towards building a durable company with long-term relationships and trust, which benefits both customers and investors.
• 🏆 The PBC structure helps Viva attract employees with the right values, contributing to the company's efficiency and growth.
• 🛡️ Viva is committed to protecting intellectual property through confidentiality agreements and patent laws, which is separate from its stance on non-compete agreements.
• 🚀 The company's leadership mindset has evolved from immediate survival as a startup to a responsibility to lead responsibly and protect the company for future generations.
• 🌍 Peter Gasner believes that the PBC model could be beneficial for other companies, but it requires a genuine alignment of values and a commitment to the multi-stakeholder approach.

Q & A

What does Viva Systems primarily do?

Viva Systems is a cloud software company that provides data and professional services to customers in the life sciences industry, helping them develop and bring medicines to market for the right patients.

Why did Viva Systems become a Public Benefit Corporation (PBC)?

Viva Systems became a PBC to legally commit to balancing the interests of all stakeholders, including employees, customers, and shareholders, rather than solely maximizing shareholder value.

What is the significance of being a PBC for Viva Systems' operations?

As a PBC, Viva Systems is legally bound to consider the interests of all stakeholders, which helps in building long-term relationships with customers and attracting employees with the right values, ultimately benefiting the company's sustainability and efficiency.

How does the PBC status affect Viva Systems' approach to potential takeovers?

In the case of a takeover offer, the board of directors of a PBC like Viva Systems must balance the interests of all stakeholders and cannot simply accept an offer based on maximizing shareholder value.

What is Peter Gasner's view on non-compete agreements?

Peter Gasner is against non-compete agreements, believing they are incorrect and that once an employer stops paying an employee, they should not have a claim on the ex-employee's future endeavors.

Why does Viva Systems not have non-compete agreements?

Viva Systems does not have non-compete agreements because they believe in a two-way relationship between employer and employee, where the employee gives their best while employed, and should be free to pursue their passions after leaving.

How does Viva Systems' stance on non-compete agreements affect the US economy?

Viva Systems' stance against non-compete agreements supports the idea that the US should follow the lead of other modern countries and states like California by banning non-competes, which could help businesses form naturally and boost the economy.

What was the mindset shift for Peter Gasner as Viva Systems grew from a startup to a durable company?

The mindset shift involved realizing the company's responsibility to lead in a responsible way and protect its growth and impact on society for future generations, moving from immediate survival to long-term sustainability.

How does Viva Systems' PBC status influence its relationship with customers?

The PBC status signals to customers that they have an equal seat at the table with investors, fostering trust and deeper relationships, which in turn helps Viva Systems grow revenue and operate more efficiently.

What advice does Peter Gasner have for companies considering becoming a PBC?

Peter Gasner advises companies to first align their values with a true multi-stakeholder approach and then put it to a shareholder vote. If the company is not genuinely committed to this approach, they should not pursue PBC status to avoid internal conflicts.

How does Viva Systems' PBC status impact its employees?

As a PBC, Viva Systems is able to attract employees who share its values, creating a more efficient and harmonious work environment, and allowing employees to feel they are part of a company that cares about more than just profit.