Goldman axes diversity rule that has 'served purpose'

Goldman Sachs' international head stated that the bank has removed an internal diversity rule that prohibited it from advising companies with all-male, all-white boards on their IPOs, arguing that the rule is no longer necessary. Previously, Goldman Sachs had pledged to help companies sell shares on the stock exchange only if they had two board members from diverse backgrounds, one of whom had to be a woman.

Richard Gnodde told the BBC in an interview, "The policy was put in place to drive behavioral change, and I think that has happened." He believes that diversity is now generally valued by corporate boards, and therefore the policy has accomplished its historical mission. He also emphasized the importance of boards having diverse perspectives, which can lead to better decision-making.

In a wide-ranging interview, Gnodde also stated that the UK government needs to launch infrastructure projects immediately and warned that policy uncertainty in the United States is suppressing the "animal spirits" of businesses. He also pointed out that the uncertainty caused by the Trump administration's trade tariff policies is affecting companies' willingness to invest, hindering economic growth.

A Goldman Sachs spokesperson said, "We ended our formal board diversity policy due to legal developments related to board diversity requirements." This follows a ruling by a US federal appeals court that the Nasdaq stock market index could not mandate that companies have women and minorities on their boards or explain why they do not, citing concerns about potential overreach.

Furthermore, a Goldman Sachs report on promoting the development of small businesses in the UK stated that growth is the most pressing national mission for the UK at present, and unlocking growth potential is the biggest challenge facing successive governments. Gnodde also said that British companies need to consolidate in order to compete globally, suggesting that the market should drive consolidation in sectors such as telecommunications and banking, ultimately fostering greater efficiency and innovation.