Goldman Sachs Won’t Take Companies Public Without at Least One Diverse Board Member
Goldman Sachs CEO David Solomon told CNBC on Thursday that the investment bank would not take companies public in the United States and Europe if they do not have at least one diverse member on its board of directors, starting on July 1.
The push for diversity by the investment bank, one of the largest underwriters of initial public offerings, will be focused on women. Solomon said that the bank plans to increase the number to two diverse board members by 2021.
“From a governance perspective, diversity on boards is a very, very important issue,” Solomon told CNBC from the World Economic Forum. He noted that in the last four years, initial public offerings in the U.S. with a woman on the board performed “significantly better” than those without.
Goldman’s board falls in line with this mandate, as four directors out of its 11-member board are women. It’s lead director, Adebayo Ogunlesi, is black. The bank is also focused on increasing diversity at the entry level, and announced a hiring goal last March of having half of all new analysts and entry-level associates hired in the U.S. be women. They also issued targets for black and Latino hires for the first time.
While Solomon didn’t mention any initiatives to increase diversity on company leadership teams, diversity in the highest ranks of companies remains an issue with women and minorities comprising a small percentage of executive teams. Our recent report explores gender diversity at the executive level in big tech.