Goldman Sachs has scrapped an internal diversity rule that banned the bank from advising all-male and all-white boards on company flotations.

The policy, introduced in 2020, required that businesses it helped to sell their shares had at least two diverse board members, one of whom had to be female.

But the investment bank’s vice chair Richard Gnodde believes the rule has driven a change in behaviour and is no longer needed, according to reports.

In an interview with the BBC, he said: “I think what is important is that you have a diversity of views on that board and if you look at these companies they’ve all embraced diversity, it’s moved along. I think it has served its purpose.”

US diversity cutbacks

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Goldman Sachs’ decision to scale back its diversity initiatives follows a string of other companies that recently did the same, including Google, Meta and Amazon.

Soon after taking office in January, US President Donald Trump issued an executive order to terminate what he deemed “radical and wasteful government DEI [diversity, equity, and inclusion] programmes” and reversed the federal government’s DEI policies.

US government staff are now obliged to report any colleagues they suspect to be promoting diversity efforts.

However, Gnodde denied Goldman Sachs had taken action because of the Trump White House and insisted the firm’s ambitions for diversity remained strong.

Some businesses had already started rolling back on their schemes last year, with supermarket giant Walmart slashing several of its diversity, equity and inclusion (DEI) initiatives in response to pressure from conservative activists in November.

In December 2024, a US federal appeals court decided that stock market index Nasdaq lacked the authority to enforce rules mandating companies to have women, minorities, or LGBTQ+ individuals on their boards, or to provide explanations for not doing so.

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A Goldman Sachs spokesperson said: “As a result of legal developments related to board diversity requirements, we ended our formal board diversity policy.”

 

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