In a bid to promote gender diversity in the corporate world, Goldman Sachs CEO David Solomon has announced that the company will only take other companies public if they have at least one “diverse” board director. He further added that the company aimed at putting a special focus on women, starting this summer.
Solomon said he believes firmly in having diverse perspectives on the Goldman Sachs board. He has also observed the same in the industry overall.
- Goldman Sachs CEO David Solomon announced on Thursday that it will only take companies public if they have at least one “diverse” board member.
- Four of the 11 board members in Goldman Sachs are women.
- The step will improve gender diversity in the corporate world.
- The plan, after that is to increase the number to two board seats in 2021.
“I look back at IPOs over the last four years and the performance of IPOs where there’s been a woman on the board in the U.S. is significantly better than the performance of IPOs where there hasn’t been a woman on the board,” Solomon said on CNBC’s “Squawk Box” from the World Economic Forum in Davos, Switzerland.
The same will be enforced in the U.S. and Europe from July 1, 2020. After that, the bank won’t take a company public unless there is at least one “diverse” board candidate. The plan, post that, is to increase the number to two board seats in 2021.
He further added that Goldman has the opportunity to make good use of its network to help clients place women on boards. This diversity is instrumental for corporate governance.
"We think it’s the right advice and we’re in a position also because of our network to help our clients if they need help placing women on boards,” Solomon said on CNBC.
Goldman isn’t the only bank that has its focus on board diversity in recent times. State Street Global Advisors also launched its “Fearless Girl” campaign in March 2017. The objective was to encourage more public companies to appoint women to board seats.
“This is an example of our saying, ‘How can we do something that we think is right and helps moves the market forward?” Solomon said. “Look, we might miss some business, but in the long run this, I think, is the best advice for companies that want to drive premium returns for their shareholders over time,” he added.
Who is David Solomon
Solomon is an American investment banker who has been the chief executive officer (CEO) at Goldman Sachs since October 2018 and its chairman since January 2019. Before this, he was President and Chief Operating Officer for the company, from January 2017 to September 2018. He was also the joint head of the investment banking division from July 2006 to December 2016.