Goldman to stop financing IPOs for companies with only white male boardmembers

Goldman to stop financing IPOs for companies with only white male boardmembers

Goldman Sachs CEO David Solomon said Thursday that the powerful investment bank will only finance initial public offerings (IPOs) for companies that have at least one nonwhite male board member.

Solomon said during a Thursday interview with CNBC that as of July 1 in the U.S. and Europe, Goldman “is not going to take a company public unless there is at least one diverse board candidate, with a focus on women.”

“Diversity on boards is a very very important issue, and we've been very very focused on it and so we're trying to find ways to encourage that,” Solomon told CNBC’s “Squawk Box” at the World Economic Forum in Davos, Switzerland.

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“This is a small step, but it's a step in the direction of saying, ‘You know what? We think this is right. We think it's the right advice,' ” he said.

Solomon argued that there is significant financial incentive for companies to diversify their boards, citing his own experiences leading Goldman and analyzing IPOs.

“We have four women out of 11, we have a black lead director. I really value the diverse perspectives I'm getting, which are helping me on the company,” Solomon said.

“Over the last four years, the performance of IPOs where there's been a woman on the board in the U.S. is significantly better than the performance of IPOs where there hasn't been a woman on the board,” he said.