- Goldman Sachs killed a policy forcing its IPO customers that they have at least 2 members of the various council.
- The representatives of the company declared that the change had been provoked by a legal decision on the diversity initiative of the Board of Directors of the NASDAQ.
- A Tulane law professor wondered if the Nasdaq’s decision applies to Goldman Sachs.
Goldman Sachs ended a policy on Tuesday forcing its IPO customers that they have at least two members of the board of directors, citing a decision of December on a similar initiative to the Nasdaq Stock Exchange.
“Due to the legal developments linked to the requirements for the diversity of the councils, we have ended our official diversity policy of the board of directors,” said Goldman spokesman Tony Fratto. “We continue to believe that successful advice benefit from various horizons and perspectives, and we will encourage them to adopt this approach.”
In December, a federal court of appeal made waves when she canceled the efforts of the Nasdaq to push the companies who wanted to register their actions on her exchange to diversify their advice or explain, as Business Insider reported .
Goldman embarked on a policy examination following the 5th decision of the Court of Appeals circuit, said a spokesperson. In recent weeks, while Goldman’s legal examination has taken place, the bank has made public two companies that did not meet these requirements: Titan America, a company that provides materials for construction and overall venture, a producer of liquefied natural gas.
Ann Lipton, a professor of law from the University of Tulane, however asked whether the Nasdaq’s decision, which was focused on the role of Securities and Exchange Commission, a government agency, applies to businesses like Goldman Sachs.
“The fifth circuit said that the NASDAQ as an exchange under the SEC surveillance cannot demand it,” Lipton told BI. “He didn’t say anything about what subscribers can demand from customers.”
The fifth circuit judged that the SEC had exceeded its authority when it approved the rules of diversity of the scholarship because the diversity is not in the mandate of the guard dog. Under the 1934 Exchange Act Securities, the NASDAQ is mainly required “to protect investors” and “promote competition,” said the jury. The Nasdaq did not appeal the decision of December.
However, the move of Goldman follows the declines of other initiatives of I by large American companies, notably Meta, Target and Walmart. Goldman has historically been among the best banks that take public enterprises worldwide.
Goldman adopted his diversity initiative of the Board of Directors in 2020 while CEO David Solomon promised to work only with IPO customers who have at least one diversified member of the Board of Directors. The following year, Goldman increased this requirement for up to two.
At the same time at the same time, Goldman created a dedicated position to help customers find members of the board of directors, including director general Ilana Wolfe has completed.
During his time as responsible for the commitment of the business board of directors, Wolfe and his team placed around 125 various people on the advice of Goldman customers.
The bank plans to continue to offer an investment service for the board of directors, said a spokesperson.
“I said to myself:” It is great that we put this commitment, but would it not be even bigger if we were part of the solution and that we help our customers to get there? “” Said Wolfe to insider in 2023.
Goldman’s change of policy was reported on Tuesday by Bloomberg.
businessinsider
