Goldman sachs’ Xmas message: No more pale male boards

One of Goldman Sachs’ most senior bankers has called for companies to step up their efforts to increase boardroom diversity – or face the cold shoulder of the Wall Street titan.

Richard Gnodde, boss of the investment bank’s London-headquartered international arm, told business associates in a Christmas letter that his experience growing up in apartheid South Africa, witnessing the horrors inflicted on black citizens, had pushed him to be a ‘better ally’ to minorities.

From next year, he wrote, Goldman will only help companies float on the stock market if they have at least two ‘diverse’ board members.

Gnodde, 60, said: ‘I grew up in apartheid South Africa and am no stranger to racism and the deep-rooted damage that it inflicts upon society.

‘As we all strive to become better listeners and better allies, I’m committed to ensuring that our firm is doing all we can to embed inclusion into all we do.’

His comments build on those made by Goldman’s chief executive, David Solomon, at the annual meeting of the business world’s global elite in the Swiss ski town of Davos in February. 

At that World Economic Forum summit, Solomon announced that from July, Goldman would only underwrite stock market listings where at least one board member was ‘diverse’.

This includes directors from a minority race, ethnicity, sexual orientation or gender identity, those from underprivileged backgrounds, and women – who are still under-represented in boardrooms across the world.

Solomon – a part-time electronic dance music DJ – added that this requirement would increase to two directors from 2021.

But Gnodde’s prominent mention of the policy in his Christmas letter was a sharp reminder to business associates, and firms hoping to list on the stock market, that they must up their game – and that the chaos caused by the pandemic is no excuse to put diversity efforts on the back burner. 

Goldman wields considerable power in the word of stock market listings. 

So far this year it has led the initial public offerings (IPOs) of 115 companies worth a total of £14.6billion, according to data from Dealogic – second only to Credit Suisse.

But several of the UK’s major IPOs this year would have failed Goldman’s diversity challenge.

The Hut Group, which was the largest company to float in the UK in 2020, has just one woman on its board which otherwise consists of white men – as does eyewear manufacturer Inspecs Group and FRP Advisory.

Gnodde said that of Goldman’s employees who had been promoted to partner level this year, 7 per cent were black and 27 per cent were women. 

And it has previously held its own careers events focused on increasing diversity, including guests such as TV presenter June Sarpong.

Welcoming Goldman’s ‘proactive stand’, Gwen Rhys, founder of networking group Women in the City, said: ‘We’ve known for decades that diverse organisations are successful organisations. 

Recently I’ve been disappointed to see that many fast-growing companies, especially in the tech sector, continue to be male dominated at ownership and board level.’