Goldman Sachs ends diversity pledge for IPOs

New York — Goldman Sachs cancelled a four-year-old policy to only take public companies that had two diverse board members, a spokesperson for the bank said on Tuesday, in the latest such move by corporations expecting greater scrutiny on social policies from US President Donald Trump.

“As a result of legal developments related to board diversity requirements, we ended our formal board diversity policy,” Goldman Sachs 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,” Fratto added.

Since taking office on January 20, Trump has issued a series of executive orders aimed at dismantling diversity, equity and inclusion programmes in the federal government and the private sector.

Goldman is a heavyweight in equity capital markets, the part of investment banking that starts selling shares in previously private companies to the public, a traditional way to unlock new funding for growing businesses.

Another rule that had tried to impose board diversity at that point in a company’s life was removed in December, when a conservative-majority court ruled against a Nasdaq exchange requirement that companies have at least one woman, racial minority or LGBTQ person on their board or explain why they did not.

Goldman’s diversity, equity and inclusion (DEI) policy had existed since 2020, when it announced that it would only take public a company in the US or Western Europe if at least one of its board directors counted as diverse, usually understood as being from a demographic historically under-represented in corporate America.

In 2021 it raised this to two diverse board members, one of whom had to be a woman.

The move towards boardroom diversity was slowing in the US before Trump took power, as a conservative backlash against DEI policies in the workplace sapped enthusiasm that mounted after the killing of George Floyd in 2020.

Several large firms had made marginal progress increasing the representation of women in management even while policies to do so were in place, a Reuters review of disclosures found.

Reuters