Goldman Sachs Won’t Take Companies Public If They Have All-Male Corporate Boards
Source | www-forbes-com.cdn.ampproject.org | Kim Elsesser
Goldman Sachs CEO David Solomon told CNBC that the investment bank wouldn’t take companies public unless the company had at least one “diverse” board member. Although he didn’t define exactly what he meant by diverse, he said the focus was on women.
“Starting on July 1 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 from the World Economic Forum. He added, “And we’re going to move towards 2021 requesting two.”
Does Diversity Translate To Profitability?
Solomon suggested that one rationale for Goldman’s new policy was to “drive premium returns for their shareholders,” and told CNBC that in the last four years, “the performance of IPOs where there has been a woman on the board in the U.S. is significantly better than the IPOs where there hasn’t been a woman on the board.” The actual numbers are striking. Companies with one diverse board member saw a 44% jump in their average share price within a year of going public, while those with no diverse board members saw only a 13% increase in share price.