Goldman Sachs to Refuse IPOs if Company Directors Are All Straight White Men

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

Goldman Sachs Group Inc. Chief Executive Officer David Solomon issued the latest ultimatum Thursday from Davos. Wall Street’s biggest underwriter of initial public offerings in the U.S. will no longer do business with a company lacking 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 Inc. 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…

After July, Goldman Sachs won’t work on a company’s IPO unless the board has at least one person who is not white, male or straight.

Next year, the bank will raise the threshold to two diverse directors, Goldman said in a statement. The bank said the decision came after it learned more than 60 U.S. and European companies in the last two years went public without a woman or person of color on the board…

JPMorgan Chase & Co. doesn’t have a similar policy to the Goldman Sachs rule, but since 2016 has had a director advisory service that works to help companies find diverse candidates for their board, the company said in a statement. Morgan Stanley did not respond to requests for comment. 

“It’s what big investors are looking for these says,” said Boston University’s Foulkes, who was previously a director at Panera Bread Co. and Bright Horizons Family Solutions. “If the board has all white males, that’s a big negative.”