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Goldman Sachs has abandoned a pledge to only take public companies with a certain number of diverse board members, underscoring the increasingly harsh environment in the US around diversity programmes.
The Wall Street bank had said in 2020 that it would work on an initial public offering of a company in the US or western Europe only if it had at least one diverse board member, defined broadly as a non-white man. A year later this requirement was lifted to two diverse board members, one of which had to be a woman.
The investment bank is now rolling that back. A spokesperson for Goldman referred to a recent US court decision that vacated a Nasdaq requirement for companies to publicly disclose board-level diversity statistics annually and to have, or explain why they do not have, diverse board members.
“As a result of legal developments related to board diversity requirements, we ended our formal board diversity policy,” Goldman said in a statement. “We continue to believe that successful boards benefit from diverse backgrounds and perspectives, and we will encourage them to take this approach.”
Goldman is one of the leading investment banks in the business of taking companies public. Its requirement was a first by a Wall Street bank and was a notable step reflecting the push at the time for greater diversity in senior corporate leadership positions under the banner of diversity, equity and inclusion programmes.
However, this DEI push has faced a backlash in recent months which has become stronger following Donald Trump’s election victory. While Goldman has maintained its internal diversity goals, a number of companies have rolled back their DEI targets.
Goldman had set up a dedicated team to help companies meet its diversity requirement and the bank plans to keep that in place to help source diverse board candidates.
Goldman’s decision to roll back the requirement was reported earlier by Bloomberg.