Goldman Sachs scrapped a diversity rule which prohibited the bank from providing advice to all-male or all-white boards regarding company flotations.
In 2020, the policy will require that companies it helps to sell shares to have at least two diverse members on their board, with one of them having to be a woman.
According to reports, Richard Gnodde, vice-chair of the investment bank believes that the rule has led to a change in behavior and is no longer necessary.
In an interview with BBC, he stated: “I believe what is important is having a diverse group of people on the board. If you look at all these companies, they have all embraced this diversity. It’s progressed.” I think that it has served its purposes.”
Goldman Sachs has decided to reduce its diversity initiatives, following a number of companies who have recently done the same. These include Google, Meta, and Amazon.
After taking office, Donald Trump issued a executive directive in order to end what he considered “radical, wasteful, and government DEI (diversity equity and inclusion) programmes”, and to reverse the federal government’s DEI policy.
US government employees are now required to report colleagues who they suspect of promoting diversity.
Gnodde, however, denied that Goldman Sachs took action due to the Trump White House. He insisted that the firm’s ambitions regarding diversity were strong.
Some businesses began to roll back their plans last year. The supermarket giant Walmart cut several of its Diversity, Equity and Inclusion (DEI), initiatives as a result of pressure from conservative activists.
A US federal appeals Court ruled in December 2024 that the stock market index Nasdaq did not have the authority to enforce any rules requiring companies to include women, minorities or LGBTQ+ people on their boards or to explain why they didn’t.
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Goldman Sachs’ spokesperson stated: “As the result of recent legal developments relating to board diversity requirements we have ended our formal policy on board diversity.”
