Posted on December 12, 2020

Goldman Escalates Diversity Push at Portfolio Companies

Ross Kerber and Simon Jessop, Reuters, December 10, 2020

Goldman Sachs Group’s asset-management arm will pressure U.S. companies to appoint more women and members of under-represented groups to their boards, an executive said, but will stop short of setting specific numerical targets for racial and ethnic diversity as some activists urge.

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After pushing companies in its investment portfolio to include at least one woman director since 2019, Goldman Sachs next year wants boards to have a second director from an under-represented background, Catherine Winner, head of stewardship efforts for the $1.8 trillion unit, said in an interview.

For that second spot, Goldman’s definition of diversity includes gender identity, sexual orientation and under-represented race and ethnic groups, and a board with two white women would meet the standard.

Goldman Sachs itself meets the standard based on details in its proxy.

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The asset-management arm can exert leverage at companies where it is an important shareholder. The firm casts proxy votes at more than 9,000 corporate annual meetings a year, and last year 25% of its votes against directors were due to a lack of a woman on the board.

Winner said Goldman stopped short of urging companies to add a racially or ethnically diverse director outright because of challenges around obtaining this information.

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Among top U.S. companies 8% of directors are Black and 5% are Hispanic or Latino, well below the groups’ share of the U.S. population, 13% and 19% respectively.

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