Goldman Sachs (GS) , the fifth-largest bank in the U.S., shook corporate America last month when it opted to take an unpopular stance on a work policy that has divided the nation.
While many companies, such as Walmart, Amazon, and Meta, have either cut or scaled back their diversity, equity, and inclusion programs amid consumer pressure and legal concerns about the policies, Goldman Sachs decided to defend its DEI initiatives.
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Goldman Sachs shareholders sent a proposal to the bank last month arguing that it should cut its DEI program since it risks putting shareholders in expensive legal trouble, such as lawsuits from employees who may allege the policies in the program are discriminatory.
Related: Goldman Sachs defends a work policy shareholders fear
Some of these policies in Goldman Sachs’ DEI program include a requirement for the bank to help companies with at least two diverse board members go public in the U.S. and Western Europe. It also has a policy that requires it to invest $10 billion in businesses and organizations that benefit Black women.
In addition, the bank has “inclusion networks” based on race and has set hiring targets for Black vice presidents in the U.S. and the U.K.
In a statement to the Wall Street Journal, Goldman Sachs responded to the proposal, stating that organizations can benefit from diversity in the workplace and will remain committed to its DEI policies and programs in compliance with the law.
Goldman Sachs switches gears
Now, it appears that Goldman Sachs is slowly caving into anti-DEI pressure. It has decided to scrap its DEI initiative, which required it to only underwrite companies in the United States and Western Europe that have at least two diverse board members.
In a statement to The Washington Post, a Goldman Sachs spokesperson said that the bank decided to cut the policy due to “legal developments.”
“As a result of legal developments related to board diversity requirements, we ended our formal board diversity policy,” said the spokesperson. “We continue to believe that successful boards benefit from diverse backgrounds and perspectives, and we will encourage them to take this approach.”
In a recent interview with BBC, Goldman Sachs International CEO Richard Gnodde said that the bank’s board diversity requirement “served its purpose.”
Related: JPMorgan Chase workers fight back against a harsh policy change
“That policy served as a catalyst to try and drive a change in behavior,” said Gnodde in the interview. “What’s important here is that you have a diversity of views on that board, and if you look at these companies – they’ve all embraced diversity.”
The move from Goldman Sachs comes after President Donald Trump issued an executive order on Jan. 21, the day after he took office, that dismantles the federal government’s DEI programs. In the executive order, he claimed that the programs enforce “illegal and immoral discrimination.” He later ordered all federal DEI employees to be put on paid leave.
More companies defend DEI
Goldman Sachs isn't the only company that previously defended its DEI program from anti-DEI critics.
Deutsche Bank CEO Christian Sewing fiercely defended his bank’s DEI program during a press conference in Frankfurt last month, according to a report from Bloomberg.
“We are now firmly behind this program,” said Sewing while speaking to reporters. “We can see how Deutsche Bank has benefited from it.”
More Labor:
- Meta’s recent layoffs take an unexpected turn
- Goldman Sachs defends a work policy shareholders fear
- Dell CEO sends a stern wake-up call to employees
JP Morgan Chase (JPM) CEO Jamie Dimon also stated in an interview with CNBC at the World Economic Forum in January that he is proud of his company’s recent DEI initiatives, despite recent efforts from activists to eradicate it from workplaces across the nation.
“We are going to continue to reach out to the Black community, Hispanic community, the LGBT community, the veterans community, we have a special program, a disabled second chance initiative,” said Dimon. “And wherever I go, red states, blue states, green states, mayors, governors and they said they like what we do.”
Costco Wholesale (COST) also raised eyebrows last month when it defended its DEI program in a notice sent to shareholders. The retailer stated that its diversity initiatives are “legally appropriate” and helps to create “opportunities for all.”
Costco’s shareholders even voted against a proposal to axe the retailer's DEI program at its annual shareholder meeting a few weeks ago.
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