Goldman Sachs has lifted its ban on companies with all White or all male boards from receiving initial public offerings services, marking it one of the biggest Wall Street firms to do an about-face on DEI.
The ban, first instituted in 2020, stipulated that the investment bank would not take a company public in the U.S. or Western Europe unless it had one non-White board member and one female board member.
Goldman issued the ban as DEI swept much of Wall Street and corporate America during the nation-wide racial turmoil and riots sparked by the death of George Floyd at the hands of police officer Derek Chauvin.
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“As a result of legal developments related to board diversity requirements, we ended our formal board diversity policy. We continue to believe that successful boards benefit from diverse backgrounds and perspectives, and we will encourage them to take this approach.” Goldman Sachs spokesperson Tony Fratto said in a statement.
The Wall Street titan will continue to source diverse candidates for its clients’ boards when requested, a spokesperson said.
Goldman’s move comes amid a changing legal landscape which has seen the courts and the Trump administration take an aggressive posture towards DEI measures.
A nearly identical 2022 Nasdaq rule that required companies listed on the exchange to either have one female director and one director who identified as an underrepresented minority/LGBTQ, or explain why the board didn’t meet these requirements, was struck down by a federal appeals court in 2022.
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Goldman’s turn away from DEI comes as other Wall Street outfits have dug in their heels. JPMorgan Chase CEO Jamie Dimon told CNBC “bring them on” at a Jan. Davos interview when asked about anti-DEI investors targeting his bank. Dimon went on to say that he supports the approach his bank has taken on diversity issues, but will course correct when necessary.
“We are going to continue to reach out to the Black community, Hispanic community, the LGBT community, the veterans community. We have a special program, a disabled second chance initiative. And wherever I go, red states, blue states, green states, mayors, governors, and they say they like what we do,” he said.
JPMorgan has also set up a “war room” to analyze new Trump policies as the president issues a flurry of executive orders purging DEI from the federal government and private businesses and other regulations.
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“At JPMorgan, we have a war room set up to analyze and evaluate each and every one of these, so they’ve been up all night and are working on it,” Mary Erdoes, CEO of JPMorganChase’s Asset & Wealth Management line of business, said at the Davos World Economic Forum in January.
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