Wall street giant rolls back requirement for diverse board members as legal and political pressures mount.

Goldman Sachs has scrapped its policy requiring companies to have diverse board members before assisting them with initial public offerings (IPOs). The move underscores the growing pushback against corporate diversity, equity, and inclusion (DEI) initiatives in the United States.

The investment bank first introduced the rule in 2020, stating that U.S. and Western European companies seeking IPOs needed at least one diverse board member, defined as a non-white man. In 2021, Goldman strengthened this requirement to two diverse board members, with at least one being a woman. The policy was a significant step in Wall Street’s efforts to address disparities in corporate leadership.

However, citing recent legal developments, including a U.S. court ruling that struck down a Nasdaq requirement for companies to disclose board diversity statistics, Goldman Sachs has now formally ended the policy. A spokesperson for the bank confirmed the decision, stating, “As a result of legal developments related to board diversity requirements, we ended our formal board diversity policy. We continue to believe that successful boards benefit from diverse backgrounds and perspectives, and we will encourage them to take this approach.”

Goldman Sachs, a powerhouse in public offerings, was the first major Wall Street firm to implement such a requirement, reflecting the corporate world’s shift toward greater diversity under the DEI banner. However, political opposition to these initiatives has been growing, particularly following Donald Trump’s election victory, which has emboldened critics of corporate diversity programmes.

Despite rolling back the requirement, Goldman is not abandoning DEI efforts altogether. The bank will maintain an internal team dedicated to helping companies identify and recruit diverse board candidates. Internally, Goldman continues to uphold its own diversity goals.

The retreat is part of a broader trend among major corporations adjusting their DEI policies in response to legal challenges and shifting political landscapes. Recently, firms such as Deloitte and Walt Disney have also scaled back diversity-driven policies, either by eliminating diversity-linked executive pay incentives or modifying internal DEI standards.

Goldman’s decision reflects the changing corporate calculus on diversity, where companies must now navigate a complex environment of legal scrutiny and political resistance while balancing internal commitments to inclusion