January 26, 2020

Old man Goldman says it won’t take companies public without women on board

Goldman Sachs announced that it will no longer take companies public unless they have at least 1 non-white male board member.

Last week, Goldman Sachs CEO David Solomon announced that beginning in July, the investment bank will no longer help companies go public unless they have at least one “diverse” board member, putting a special focus on women.

Women are underrepresented on corporate boards

According to research from Crunchbase and the Harvard Business Review, among “200 of the most heavily funded US-based, private, venture-backed companies”: 

  • 7% of corporate board members were women.
  • 60% of companies had no female board members.

In the last 2 years, more than 60 companies in the US went public without a woman or person of color on their board.

But Goldman thinks targeting IPOs could increase diversity

Goldman isn’t the first institution to call out the lack of diversity on corporate boards: 

  • California passed a controversial law requiring at least 1 female board member earlier this year.
  • BlackRock and Vanguard use their voting power to pressure all-male boards to add women.
  • And JPMorgan Chase & Co. and other banks offer advisory services to help companies find diverse candidates.

But since Goldman is the single largest IPO underwriter in the country, the buck often stops with them — and that means this new policy could have a huge impact. 

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