Goldman Sachs Will No Longer Finance IPOs For Companies With Only White Male Board Members, CEO Says

Goldman Sachs CEO David Solomon said Thursday that the Wall Street investment bank will only finance initial public offerings (IPOs) for companies that have at least one nonwhite male board member. Solomon made the remark during a Thursday interview with CNBC.

“Starting on July 1st in the U.S. and Europe, we’re not going to take a company public unless there’s at least one diverse board candidate, with a focus on women,” Solomon said on CNBC’s “Squawk Box” from the World Economic Forum in Davos, Switzerland. “And we’re going to move towards 2021 requesting two,” he added. Solomon added that about 60 companies in the U.S. and Europe have gone public recently with all white, male boards.

Solomon preceded his news-making statement by saying that, 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. Goldman won’t take companies public without ‘at least one diverse board candidate,’ CEO says.

“Diversity on boards is a very very important issue, and we’ve been very very focused on it and so we’re trying to find ways to encourage that,” Solomon told CNBC’s “Squawk Box” at the World Economic Forum in Davos, Switzerland.

“This is a small step, but it’s a step in the direction of saying, ‘You know what? We think this is right. We think it’s the right advice,’ ” he said.  Solomon argued that there is significant financial incentive for companies to diversify their boards, citing his own experiences leading Goldman and analyzing IPOs. “We have four women out of 11, we have a black lead director. I really value the diverse perspectives I’m getting, which are helping me on the company,” Solomon said.