Goldman to refuse listings if all directors are white, straight men

The era of the white, all-male board is coming to an end.

Goldman Sachs Group CEO David Solomon issued the latest ultimatum on Thursday from Davos. Wall Street’s biggest underwriter of initial public offerings in the US will no longer take a firm public in the US and Europe if it lacks a director who is either female or diverse.

The mandate is the latest in a series of signals that non-diverse boards and management are unacceptable. BlackRock and State Street Global Advisors are voting against directors at companies without a female director. Public companies with all-male boards based in California now face a $100,000 fine under a new state law.  

“It’s pretty amazing,” said Fred Foulkes, a management professor at the Boston University Questrom School of Business. “It's a seismic change. I was quite amazed and I wonder what's going to happen at JPMorgan and Morgan Stanley.” 

The corporate board has become a rare bright spot for gender and racial diversity at the highest echelons of corporate America. 

Almost half of the open spots at S&P 500 companies went to women last year, and for the first time they made up more than a quarter of all directors. In July, the last all-male board in the S&P 500 appointed a woman. 

Still, new boards are less diverse: Among the top 25 IPOs by value each year from 2014 through 2018, 10 companies had no female directors, said Malli Gero, co-founder and senior adviser to 2020 Women on Boards, an organization that pushes for the Russell 3000 index to have at least 20% women directors on its boards. Last year, Goldman Sachs was hired to underwrite WeWork’s IPO, which only added a female director after its initial prospectus prompted criticism of its all-male board.