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Goldman Sachs Asset Management to Mandate Board Diversity

Published on: December 11, 2021

Authors: Ani Huang

Topics: Shareholder Viewpoints

Beginning in March of 2022, Goldman Sachs Asset Management (GSAM) will require companies to have a board comprised of at least 10% female directors and (for the S&P 500 and FTSE 1000) at least one director from an under-represented ethnic minority group.

This is a change from GSAM’s previous policy, which only required one female director and did not include explicit requirements regarding ethnic diversity. However, according to GSAM Co-Head of Fundamental Equity Katie Koch, “We have continued to increase our expectations with respect to boardroom diversity as momentum behind more stringent requirements continues to grow.”

GSAM will vote against members of the nominating committee of any company that fails to meet its standards and in the U.S., will vote against the entirety of any all-male board. According to a Reuters interview with Head of Stewardship Catherine Winner, about 2,500 companies globally do not currently meet the new requirements. The Reuters interview also points out that this new voting policy is only possible due to increased disclosure from companies on the ethnic makeup of their boards, foreshadowing a similar increase in scrutiny which is likely to follow expanded disclosure of workforce demographics such as the EEO-1 report.

Ani Huang

President and CEO, Center On Executive Compensation

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