What’s the news from Davos? Well, the new Goldman Sachs CEO made some news when he told CNBC that, starting July 1, in the U.S. and Europe, Goldman will take companies public only if there is “at least one diverse board candidate, with a focus on women…. And we’re going to move towards 2021 requesting two.” He continued that, recently, there have been about 60 companies in the U.S. and Europe that have gone public with all white, male boards. However, over the last four years, “the performance of public offerings of U.S. companies with at least one female director is ‘significantly better’ than those without.” [Emphasis added.] While he recognized that the decision could cause Goldman to lose some business, “in the long run,” he said, “this I think is the best advice for companies that want to drive premium returns for their shareholders over time.” Will other investment banks follow suit?
One problem he identified is that companies tend to select directors that have prior experience as directors or CEOs or CFOs, which has led to a pool of candidates that excludes many women. However, the CEO volunteered that Goldman, which has four women on its board and a “far-reaching network of corporate executives,” might just be able to help its clients recruit women board candidates. According to CNBC, the CEO characterized Goldman’s new position as “an example of our saying, ‘How can we do something that we think is right and helps moves the market forward?’”