Goldman Sachs drops its diversity rule, stating it has achieved its goal of fostering diverse boards.
Goldman Sachs’ vice chairman has stated that the bank has abandoned an internal diversity policy that prevented it from advising boards comprised entirely of white men on company IPOs, explaining that the rule was no longer necessary.
The investment bank had previously committed to only helping a company go public if it had two board members meeting specific diversity criteria, one of whom had to be a woman.
However, Richard Gnodde told the BBC: “That policy was put in place to try and drive a change in behaviour and I think that’s happened.”
In an extensive interview, he also emphasized that the UK government should accelerate infrastructure projects immediately.
Goldman Sachs introduced its diversity policy for boards in 2020, initially requiring one diverse board member for companies wishing to float. This was later increased to two diverse members.
Mr. Gnodde commented: “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.”
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According to the think tank The Conference Board, while US boards are “more diverse than ever,” there has been a “marked slowdown” in the recruitment of racial minorities to boards between 2022 and 2024.
In 2024, among the 500 largest US companies, 26% of directors were non-white, and 34% were women, as reported by the think tank.
In December 2024, a US federal appeals court ruled that Nasdaq did not have the authority to enforce rules mandating companies to include women, minorities, or LGBTQ+ individuals on their boards or to explain why they had not done so.
A Goldman Sachs spokesperson explained: “As a result of legal developments related to board diversity requirements, we ended our formal board diversity policy.” The firm did not clarify whether this referred specifically to the Nasdaq case.
In one of his initial actions after taking office, US President Donald Trump signed an executive order to end “radical and wasteful government DEI [diversity, equity, and inclusion] programs.”
Following this, several companies, including Google and Meta (the parent company of Instagram and Facebook), scaled back their diverse hiring initiatives.
When asked if firms were retreating from diversity policies due to the Trump administration, Mr. Gnodde responded: “I can only speak for ourselves, I don’t think that’s the case. Our ambitions are to continue to take things forward and frankly to go much further than we have been.”
However, he acknowledged that the uncertainty surrounding Trump’s trade tariff policies had been affecting companies’ “animal spirits” and investment enthusiasm.
Mr. Gnodde said: “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.”
Trump initially proposed imposing a 25% tariff on goods from Canada, Mexico, and China, but he later suspended it for 30 days for Canada and Mexico. Subsequently, he announced a 25% tariff on all steel and aluminium imports into the US, drawing sharp reactions from Canada and the European Union.
On a different note, Mr. Gnodde urged the UK government to move forward with infrastructure projects without delay.
Recently, Chancellor Rachel Reeves voiced support for a third runway at Heathrow, the expansion of Luton and Gatwick airports, and the creation of a “growth corridor” between Oxford and Cambridge. However, these initiatives are not expected to be completed for several years.
With the UK economy’s growth slowing, according to official statistics, Mr. Gnodde stressed the importance of taking action sooner rather than later.
He stated: “The long range projects are very interesting. We need to put them in place but they’re going to take a long time.”
He added: “Let’s find some infrastructure builds that we need to do, whether it’s in the energy sector, whether it’s in transportation, improving the road network, something on energy transition. These plans all sit on the Treasury’s desk. Why don’t we put them out to tender, get the private sector to bid on terms that will be attractive to the private sector, and you will see competition.”
In a recent report on boosting small businesses in Britain, Goldman Sachs noted: “If there are two things we know from the first six months of a new administration in the UK, it is that growth is the pressing national mission and unlocking it is perhaps the greatest challenge that consecutive governments have faced.”
Mr. Gnodde also observed that Labour had “sent a strong message on the competition front” by recently removing the chair of the Competition and Markets Authority.
He suggested that such actions could trigger growth and help the UK become “globally competitive.”
Furthermore, he proposed that UK businesses should consolidate to better compete on the international stage.
“How many of these players do we need?”, he asked. “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.”