Goldman Sachs Abandons Pledge for Diverse IPO Boards amid Legal Challenges
Goldman Sachs Group Inc. has rescinded its policy of requiring diverse board membership for companies seeking initial public offerings (IPOs) in the US or Western Europe.
Previously, the investment bank mandated at least two diverse board members, including one woman, for IPO advisory services. This policy, implemented in 2020, aimed to promote diversity in corporate governance.
Goldman Sachs Spokesperson Tony Fratto stated the decision to end the formal policy was driven by legal developments. "We continue to believe that diverse backgrounds and perspectives contribute to successful boards," he said.
The pledge emerged amidst a broader push for diversity in corporate America, with asset managers like BlackRock advocating for female board representation. Goldman used its influence in the IPO market to drive change, facing resistance from some clients.
However, a federal appeals court in December struck down a similar rule by Nasdaq Inc., citing concerns about "invidious discrimination." This ruling and subsequent legal challenges prompted US corporations to reassess their diversity, equity, and inclusion (DEI) policies.
Goldman has since advised on IPOs without meeting its diversity criteria, such as Titan America SA's recent listing. The Trump administration has also initiated efforts to eliminate DEI in companies, particularly federal contractors.