Goldman Sachs CEO David Solomon says the bank he leads will no longer help take companies public in the U.S. and Europe if they do not have at least one “diverse” board member “with a focus on women.”
The new policy starts July 1, Solomon said on CNBC Thursday from the World Economic Forum in Davos, Switzerland. For 2021, firms looking to do IPOs with Goldman must have at least two “diverse” board members, he added.
Over the past four years, the performance of U.S. IPOs for firms with a woman on their respective boards is “significantly better” than for firms without such diversity, the executive pointed out — adding that some 60 companies in the U.S. and Europe recently went public with all white, male boards.
“From a governance perspective, diversity on boards is very important, and we have been focused on it,” Soloman said.
Goldman Sachs’ 11-member board includes four women — Michelle Burns, Drew Faust, Ellen Kullman and Jan Tighe. Its nine-member executive committee has three women — Chief Accounting Officer Sheara Fredman, Global Treasurer Beth Hammack and General Counsel Karen Seymour.
Though the investment bank could “miss some business” with the new approach, its leaders believe diversity can help “drive premium returns for … shareholders over time,” Solomon said.
“This is an example of our saying, ‘How can we do something that we think is right and helps moves the market forward?’” he said.