Goldman Sachs abandons IPO diversity pledge with US DEI goals under fire

Yahoo

11-02-2025

(Bloomberg) — Goldman Sachs Group Inc. (GS) is abandoning a significant pledge it made to refuse initial public offering business with companies that had all White, male boards.
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Wall Street's leading investment bank had a policy that it would only take a company public in the US or Western Europe if it included two diverse board members, one of whom must be a woman. The rule had initially been put in place in 2020 with a requirement for at least one diverse board member.
'As a result of legal developments related to board diversity requirements, we ended our formal board diversity policy,' said Tony Fratto, a spokesperson for Goldman Sachs. 'We continue to believe that successful boards benefit from diverse backgrounds and perspectives, and we will encourage them to take this approach.'
The pledge was made at a time when much of corporate America was swept up in the fervor to champion diversity. Large asset management firms like BlackRock Inc. (BLK) were voting against directors at companies without a female board member.
Goldman used its heft in the IPO business to mandate change at companies that they believed were falling behind the times,and even brushed off griping from their own clients to push ahead with this measure.
Goldman has already advised on initial public offerings that don't appear to meet its diversity criteria. It helped on a listing that priced last week for Titan America SA, a cement company whose website lists no women on its board.
A similar rule for listings on Nasdaq Inc.'s US exchange was struck down by a federal appeals court in December as conservative ramped up the pressure against diversity, equity and inclusion efforts in corporate America. Nasdaq's policy was challenged by a group led by Edward Blum, the activist best known for helping to end affirmative action in college admissions. Rather than attacking Nasdaq directly, the group raised issue with the US Securities and Exchange Commission's approval of the rule, which it claimed enabled 'invidious discrimination.' State attorneys general then joined in with a similar message.
US corporations began reviewing their DEI policies after the affirmative action decision in 2023, and companies from Amazon.com Inc. to Walmart Inc. (WMT) have since announced they are backtracking on some of their initiatives. The new Trump administration has ramped up a campaign to root out DEI from companies, specifically targeting federal contractors in the first phase of its plan.
—With assistance from Sonali Basak.
(Updates with additional details throughout.)
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