Goldman Sachs Alters Board Diversity Criteria
Goldman Sachs' board has dropped formal DEI criteria from its director selection process. The move signals a shift toward what the firm terms “merit-based” governance, representing a high-profile recalibration of corporate diversity initiatives.
- The policy reversal follows a shareholder proposal submitted in September by the National Legal and Policy Center, a conservative activist group, which has challenged DEI initiatives at 11 Fortune 500 companies. Goldman agreed to remove explicit DEI criteria in exchange for the group withdrawing its proposal. - This recent change to Goldman's own board selection follows the firm's earlier move to scrap its 2020 policy that required companies to have at least two diverse board members before Goldman would underwrite their IPO. - The original IPO policy, announced by CEO David Solomon, was based on performance data showing that U.S. companies with at least one female director saw significantly better stock performance one year post-IPO. - This move is part of a broader trend among financial institutions; State Street, Citigroup, Bank of America, and Wells Fargo have also rolled back certain diversity and inclusion initiatives. - The shift away from formal DEI metrics is influenced by a changing legal landscape, including the 2023 Supreme Court ruling on affirmative action in college admissions and a 2024 federal court decision striking down Nasdaq's board diversity rules. - The specific change involves removing a category of "other demographics"—reportedly including race, gender identity, and sexual orientation—from the board's governance committee guidelines, while retaining broader diversity considerations like background and military service.
