DAVOS, SWITZERLAND — Goldman Sach's CEO is warning companies dreaming of going public that they better be diverse.
David Solomon said on CNBC last week that starting July 1st the bank will not help companies go public unless they have at least one diverse board member. He added that by 2021 they will want to see two diverse board members.
“Look, we might miss some business, but in the long run, this I think is the best advice for companies that want to drive premium returns for their shareholders over time,” Solomon said.
He is including women as a category helping make boards diverse.Solomon said that companies that have gone public in the past four years did significantly better if they had at least one woman director.
He pointed to as many as 60 companies that recently went public that had all white, male boards. He suggested a part of the problem is cyclical; many new board members are pulled from a pool of previous CEOs or CFOs rather than pulling from new talent.
Goldman Sachs has four women on its board of directors.