Goldman Sachs CEO David Solomon told CNBC on Thursday that starting this year, his investment bank wouldn’t help companies go public without at least one “diverse” board member.
“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 said on CNBC’s “Squawk Box” from the World Economic Forum in Davos, Switzerland “And we’re going to move towards 2021 requesting two,” he added.
Solomon preceded his news-making statement by saying that, over the last four years, the performance of public offerings of U.S. companies with at least one female director is “significantly better” than those without. About 60 companies in the U.S. and Europe have gone public recently with all white, male boards, he said.
“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.
Part of the problem is that most board candidates are selected from people who have already served as corporate CEOs or CFOs or public company directors, which locked out women from being added to boards, Solomon said. He added that Goldman, with its far-reaching network of corporate executives, could help clients find female board candidates if needed. Goldman currently has four women on its 11-person board.
“This is an example of our saying, ‘How can we do something that we think is right and helps moves the market forward?'” Solomon said.
Solomon has been at the helm of the New York-based bank since October 2018. He is expected to reveal a series of multi-year financial targets at the company’s first ever investor day later this month.