Goldman Sachs Pledges Diversity for Everyone But Themselves

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On January 23, 2020 Goldman Sachs announced a “bold” initiative effective July first to only underwrite IPO’s in the US and Europe for companies that have one diverse board member. With the average number of board members at private companies according to the Wall Street Journal resting at 11.2, allotting 1 board seat to a “diverse board member” allocates just 8.9% of board seats to 61.5% of the population that could be considered a diverse candidate (U.S Census). 

Goldman Sachs made some strong points for their reasoning behind this initiative, David Solomon, Board Member & CEO of Goldman Sachs, wrote, “US companies that have gone public with at least one female board director outperformed companies that do not, one year post-IPO”. Multiple studies, like that from the Harvard Business Review, have proven diversity drives innovation and market growth. However while pushing their diversity initiative on other companies considering IPOs, Goldman still continues to pay its female employees 51% less than men, according to an article in the Independent; with all of its top management positions (CEO, CFO, International Head, Operating Chief) being filled by men. 

While they have been making steps towards inclusion; improving their pay gap by 4.5%, rolling out a 20 week paid parental leave initiative, and pledging $20,000 to help cover fertility treatments, they are still a long way from diversity equilibrium. Which begs the question: why is Goldman looking to improve its client’s inclusivity when it can’t improve its own?