Goldman Sachs May Drop Board DEI Factor
Goldman Sachs is reportedly preparing to drop diversity, equity, and inclusion (DEI) as a specific factor in its board appointment process. The potential shift in policy is said to be a response to shareholder pressure and changing political dynamics surrounding corporate DEI initiatives. This move could signal a broader trend among major financial institutions regarding their governance and social policies.
- The original policy, announced by CEO David Solomon in January 2020, stipulated that Goldman Sachs would not underwrite an IPO in the U.S. or Europe for any company that lacked at least one diverse board member, with an initial focus on women. The requirement was set to increase to two diverse members in 2021. - Goldman justified the initial policy by citing financial performance, stating that U.S. IPOs over the previous four years with at least one female board member saw significantly better stock performance. One report noted companies with a diverse board member saw an average share price increase of 44% within a year of their IPO, compared to 13% for companies without one. - The more recent reversal of its IPO policy in February 2025 was attributed to "legal developments." This followed a December 2024 ruling by the U.S. Court of Appeals for the 5th Circuit that struck down a similar Nasdaq rule requiring listed companies to have at least two diverse directors or explain their absence. - The latest move to drop DEI considerations for its own board appointments is a direct response to a shareholder proposal submitted in September 2025 by the National Legal and Policy Center (NLPC), an activist investor group. Goldman reportedly reached an agreement with the NLPC to withdraw the proposal in exchange for the policy change. - The NLPC has successfully pushed for similar changes at other major corporations, including American Express and John Deere, as part of a broader campaign challenging DEI initiatives at 11 Fortune 500 companies. - This policy shift at Goldman Sachs is part of a larger trend of corporations, including Meta and Amazon, scaling back on DEI programs amid increasing political and legal pressure. Republican attorneys general have also warned major financial institutions that certain DEI policies could lead to legal action.
