Boards packed with bros don’t get IPOs.
That’s the new policy at Goldman Sachs, whose chief executive David Solomon said the Wall Street giant won’t take any company public unless it has at least one “diverse” board member.
In a Thursday interview with CNBC, Solomon said the new initiative will particularly focus on getting more women on corporate boards. The requirement will ratchet up to two diverse board members in 2021, he added.
“I look back at IPOs over the last four years and the performance of IPOs, [when] it’s been a woman on the board, in the US is significantly better than the performance of IPOs where there hasn’t been a woman on the board,” Solomon said at the World Economic Forum in Davos, Switzerland.
So starting on July 1st in the US 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.”
In a statement to The Post, Goldman announced that it will extend the policy to all private companies in which Goldman has a majority investment stake. The bank said it will provide any private company that’s interested with access to its network of potential board candidates.
In the US and Western Europe, the new policy will focus on “traditionally under-represented groups across various criteria, including gender, race, ethnicity, sexual orientation, or gender identity,” according to a source close to the bank.
While Goldman is the biggest financial player to make a bold move on diversity at the board level, it’s not the first. In 2017, Boston-based investment giant State Street launched its “Fearless Girl” campaign to pressure public companies to put more women on their boards.
That program became famous for the eponymous sculpture that State Street commissioned to symbolize it, which until December 2018 stood opposite the “Charging Bull” statue near Wall Street and now stands in front of the New York Stock Exchange.
State Street has claimed that more than 300 companies have acted on their advice to add women to their boards.
Goldman’s move, however, could pack extra punch, as it’s one of the preeminent underwriters of IPOs globally. Last year, Goldman was among the banks caught up in the botched effort to take WeWork public.
Goldman had valued WeWork at $47 billion before abandoning the process when the company’s anticipated valuation dropped to $8 billion.
WeWork’s board was entirely made up of men.