(qlmbusinessnews.com . Thurs 13th Feb, 2025) London, UK —
Goldman Sachs Scraps Diversity Rule for IPOs, Citing ‘Purpose Served'
Goldman Sachs has abandoned its policy requiring companies seeking initial public offerings (IPOs) to have at least two diverse board members, including one woman. Richard Gnodde, Vice Chair of Goldman Sachs, stated that the rule, implemented in 2020, had achieved its objective of promoting greater board diversity and was therefore no longer necessary.
The move comes amid a broader debate about diversity, equity, and inclusion (DEI) initiatives, particularly in the US, where legal challenges and political pressures have prompted some companies to scale back their DEI programs. Gnodde, however, denied that the decision was influenced by these factors, affirming Goldman Sachs' continued commitment to diversity.
“That policy was put in place to try and drive a change in behaviour and I think that's happened,” Gnodde told reporters. “I think what is important is that you have a diversity of views on that board and if you look at these companies they've all embraced diversity, it's moved along. I think it has served its purpose.”
The decision follows a ruling in the US last December, where a federal appeals court stated that Nasdaq did not have the authority to impose rules requiring companies to have women and minorities or LGBTQ+ people on their boards or explain why they did not.
The think tank, The Conference Board, reported that in 2024, among the 500 largest US firms, the share of non-white directors was 26% and the share of women directors was 34%.
A Goldman Sachs spokesperson said: “As a result of legal developments related to board diversity requirements, we ended our formal board diversity policy.”
Beyond diversity, Gnodde also addressed the UK economy, urging the government to accelerate infrastructure projects to stimulate growth. He called on the Treasury to release infrastructure plans and invite private sector bids, particularly in energy and transport. He also commented on Labour's “strong message on the competition front” after it recently ousted the chair of the Competition and Markets Authority.
Gnodde suggested that UK businesses should consolidate to be more competitive globally. “How many of these players do we need? How many telcos do we need? How many banks do we need? I think the market should be able to drive that if we're going to compete on the global stage.”
He further conceded that uncertainty surrounding Donald Trump's trade policies was dampening investment appetite, adding, “I think right now, the mood is on the margin [is] a little tempered, because people are uncertain about exactly what the policy outcome will be and exactly what the impacts will be.”
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