Goldman Sachs is set to remove race, gender identity, and other diversity-related criteria from its evaluation process for prospective executive board members. This significant policy shift comes after sustained pressure from an activist shareholder group that has been campaigning to eliminate diversity, equity, and inclusion requirements in corporate governance.
Shareholder Pressure Leads to Policy Change
The National Legal and Policy Center, a small Goldman Sachs shareholder, submitted a formal request to the banking giant in September 2023, urging the elimination of DEI considerations from board candidate assessments. According to a Wall Street Journal report, Goldman recently informed the NLPC of its decision to remove these criteria, with both parties signing an agreement that will see the shareholder group withdraw its proposal.
Goldman's board is expected to formally approve these changes this month, according to sources familiar with the matter. The bank's current governance committee evaluates qualified candidates based on four primary factors, one of which includes a broad description of diversity encompassing viewpoints, background, military service, and "other demographics." This "other demographics" category has reportedly included race, gender identity, ethnicity, and sexual orientation, but would be eliminated under the proposed revisions.
Broader Corporate Retreat from DEI Initiatives
This move represents part of a wider corporate pullback from DEI programs across America since Donald Trump returned to office in January 2023 and launched a campaign against such practices in both government and the private sector. The NLPC announced earlier this month that it had reached similar agreements with American Express and John Deere to "eliminate DEI for Board candidates," having submitted shareholder proposals to 11 Fortune 500 companies challenging their diversity initiatives.
Goldman's policy change follows other recent adjustments at the bank, including last year's decision to scrap a policy that encouraged diversity on the boards of companies it takes public. Several major corporations have scaled back their DEI efforts in recent months, with Meta announcing the end of its DEI programs just days before Trump's inauguration, and Amazon informing employees it was "winding down outdated programs and materials" related to representation and inclusion.
Executive Order Accelerates Corporate Response
Shortly after taking office, President Trump signed an executive order directing federal agencies to dismantle DEI policies and scrutinize such practices among contractors and private corporations. This has prompted numerous companies to reevaluate their diversity commitments.
Deloitte instructed employees working on federal government contracts to remove pronouns from their email signatures last year, while Target scaled back its DEI initiatives. Alphabet's Google announced it was scrapping its goal to hire more people from historically underrepresented groups and would review some of its diversity programs. In April, Barclays removed its gender and ethnicity targets for US staff, and Lego eliminated diversity-related terminology from its annual sustainability report.
Neither Goldman Sachs nor the National Legal and Policy Center immediately responded to requests for comment regarding these policy changes. The shift represents a significant departure from the bank's previous approach to board diversity and reflects evolving corporate attitudes toward DEI initiatives in the current political climate.
