Goldman Sachs Drops Diversity Policy, Says Change Has Been Achieved

The move to lift the diversity requirement comes amid evolving legal contexts and aims to push UK infrastructure development while expressing concerns over US policy clarity affecting corporate investment.

Goldman Sachs is making headlines as CEO Richard Gnodde reveals the bank has discontinued its internal diversity policy that previously restricted its advisory role to boards lacking diverse representation. Originally implemented in 2020, the policy mandated that companies seeking to float shares had to have a minimum of two diverse board members, including at least one woman. Gnodde addressed this shift in a recent interview with the BBC, emphasizing that the rule was designed to promote change, which he believes has now been achieved.

Gnodde remarked, “That policy was put in place to try and drive a change in behaviour and I think that's happened.” He added that it is now necessary for boards to have a range of perspectives, highlighting that many companies have positively embraced diversity in their leadership.

The decision is also influenced by recent legal developments, specifically a US federal appeals court ruling that barred Nasdaq from enforcing diversity rules for boards. Goldman Sachs stated that due to these developments, it was time to formally end its board diversity policy.

While discussing broader implications, Gnodde pointed to economic uncertainty stemming from recent US policies regarding trade and tariffs, which he noted could suppress business investments and confidence, reflecting on the “animal spirits” of firms. The sentiment is particularly relevant as companies face unpredictability about policy impacts.

Moving on to the UK context, Gnodde urged the government to commence long-awaited infrastructure projects to stimulate growth. With Chancellor Rachel Reeves recently advocating for significant developments in transportation, including airport expansions, Gnodde insisted on the urgency of continuing with essential structural plans to enhance the economy. Despite many of these initiatives taking years to materialize, he remarked, “Let's find some infrastructure builds that we need to do... and put them out to tender.”

He further expressed concerns over the current UK economic climate, emphasizing the pressing need for growth in the face of stagnation and competing urges to foster a more competitive global marketplace. The message is clear: with Goldman Sachs highlighting the critical nature of growth in a recent report, the conversation about competition and economic vitality in the UK is just heating up.