The chief executive of Goldman Sachs announced Thursday that the bank will not help companies go public unless their boards include at least one “diverse” board member.
Goldman Sachs CEO David Solomon said the bank plans to implement a policy in July to stop financing initial public offerings of companies that have no minority or female board members.
“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 told CNBC at the World Economic Forum in Davos, Switzerland. “And we’re going to move towards 2021 requesting two.”
Solomon said he is willing to risk losing business over the policy, but he added that the public offerings of U.S. companies with at least one female director have tended to do “significantly better” during the past four years.
“Look, we might miss some business, but in the long run, this I think is the best advice for companies that want to drive premium returns for their shareholders over time,” Solomon said. “This is an example of our saying, ‘How can we do something that we think is right and helps moves the market forward?’”
Solomon even offered to help companies find and select female board candidates if they want the assistance. Currently, four of Goldman Sachs’s 11 board members are women.
“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.