Goldman Sachs Group is killing a significant pledge it made to refuse initial public offering business with companies that had all-white, male boards of directors.
Wall Street’s leading investment bank had a policy that it would take a company public in the U.S. or Western Europe only if it had two diverse board members, one of which must be a woman.
That push had initially been put in place in 2020 with a requirement for at least one diverse board member.
“As a result of legal developments related to board diversity requirements, we ended our formal board diversity policy,” spokesperson Tony Fratto said.
“We continue to believe that successful boards benefit from diverse backgrounds and perspectives, and we will encourage them to take this approach.”
The pledge was made at a time when much of corporate America was swept up in the fervor to champion diversity. Large asset management firms such as BlackRock were voting against directors at companies without a female board member.
Goldman Sachs used its heft in the IPO business to mandate change at companies it believed were falling behind the times, and even brushed off griping from its own clients to push ahead with this measure.
Goldman has already advised on initial public offerings that don’t appear to meet its diversity criteria. It helped on a listing that priced last week for Titan America, a cement company whose website lists no women on its board.
A similar rule for listings on Nasdaq's U.S. exchange was struck down by a federal appeals court in December as conservatives ramped up the pressure against diversity, equity and inclusion efforts in corporate America. Nasdaq’s policy was challenged by a group led by Edward Blum, the activist best known for helping to end affirmative action in college admissions.
Rather than attacking Nasdaq directly, the group raised issue with the Securities and Exchange Commission’s approval of the rule, which it claimed enabled “invidious discrimination.” State attorneys general then joined in with a similar message.
U.S. corporations began reviewing their DEI policies after the affirmative-action decision in 2023, and companies from Amazon to Walmart have since announced they are backtracking on some of their initiatives. The new Trump administration has ramped up a campaign to root out DEI from companies, specifically targeting federal contractors in the first phase of its plan.
