Goldman Sachs, one of the largest banks of the United States has announced that it will not accept any companies for initial public offering or for public listing if they do not have at least one “diverse” member on the board of directors of the company starting this year itself.
This was said buy the bank’s CEO, David Solomon.
“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 in a television interview.
While some could associate this announcement with a marketing strategy by the firm, many also believe that the step taken by Goldman Sachs is timely because of an already existing demand in the market and among investors about presence of at least one female board member while also hoping for far more “diversity” at company board of publicly listed companies.
For example, the office sharing startup WeWork was forced to include Harvard professor Frances Frei as its first female board member after the company realized that that it needed to bring in diversity into its all male board before the launch of its IPO. The listing however had to be called off after a huge debacle at the company.
However market analysts say that it has now become common to add a female member to a company’s all male board and therefore what investor activists look for is how close to the launch of an IPO does a company announce such inclusions.
It took 10 years for Airbnb to bring in its first female board member after being founded in 2008. That was two years before its IPO is expected to be launched - in 2020. However analysts point out 10 years is a long time to go without any diversity on a board. But that is not an anomaly. For example, the first female board member was inducted into the board of Slack in 2017 after eight years of founding and two years before its IPO. Similarly, the first female board member at Peloton, the fitness company, in the spring of 2018 – just a bit over a year before it launched its IPO in September of last year.
“We realize that this is a small step, but it’s a step in a direction of saying, ‘You know what, we think this is right, we think it’s the right advice and we’re in a position also, because of our network, to help our clients if they need help placing women on boards . . . So this is an example of us saying, ‘How can we do something that we think is right and help moves the market forward?’” Solomon said in the television interview.
(Source:www.techcrunch.com)
This was said buy the bank’s CEO, David Solomon.
“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 in a television interview.
While some could associate this announcement with a marketing strategy by the firm, many also believe that the step taken by Goldman Sachs is timely because of an already existing demand in the market and among investors about presence of at least one female board member while also hoping for far more “diversity” at company board of publicly listed companies.
For example, the office sharing startup WeWork was forced to include Harvard professor Frances Frei as its first female board member after the company realized that that it needed to bring in diversity into its all male board before the launch of its IPO. The listing however had to be called off after a huge debacle at the company.
However market analysts say that it has now become common to add a female member to a company’s all male board and therefore what investor activists look for is how close to the launch of an IPO does a company announce such inclusions.
It took 10 years for Airbnb to bring in its first female board member after being founded in 2008. That was two years before its IPO is expected to be launched - in 2020. However analysts point out 10 years is a long time to go without any diversity on a board. But that is not an anomaly. For example, the first female board member was inducted into the board of Slack in 2017 after eight years of founding and two years before its IPO. Similarly, the first female board member at Peloton, the fitness company, in the spring of 2018 – just a bit over a year before it launched its IPO in September of last year.
“We realize that this is a small step, but it’s a step in a direction of saying, ‘You know what, we think this is right, we think it’s the right advice and we’re in a position also, because of our network, to help our clients if they need help placing women on boards . . . So this is an example of us saying, ‘How can we do something that we think is right and help moves the market forward?’” Solomon said in the television interview.
(Source:www.techcrunch.com)
