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Will Goldman Sach’s Strategy for More Diverse Boards Work?
Earlier this year, Goldman Sachs CEO, David Solomon announced that the investment bank would not help companies go public if they did not have at least one diverse board member. After all, as recently as September 2019, the great WeWork IPO fiasco included an all white, all male board. The new rule, which goes into effect on July 1st, would have precluded Goldman from working on the WeWork deal if it had been in place at the time.
Goldman was the biggest underwriter of IPOs in the US last year, so its rule might sway firms eager to work with them. And as more tech-bro founded start-ups prepare themselves for the public markets, the rule will likely raise the topic of diversity and frame it in a much different way — pressure from the marketplace — than before. Evidence already exists that market pressure can influence the diversity of corporate boards: In 2015, a drop in board seats held by African Americans was attributed to activist hedge funds, who “tend to run slates of mainly white men when they are fighting for board seats.”
While Goldman’s action is certainly not enough, the investment bank sits in a unique position to influence corporate board diversity beyond its own. But the metric of board diversity seems like a terrible place to fight for change, so close to the end of careers. Instead, firms should be hiring diverse internship classes and increasing the numbers of women and minorities in their in-house talent pools.
Word on the Street
The CEO of millennial co-working space The Wing resigned this week amid concerns from employees that it failed “to practice the intersectional feminism that it preaches to the rest of the world.” The incident is an example of a larger trend in which corporate feminism ignores black voices.
The emotional exhaustion being felt by black professionals in America.
Corporate America Has Failed Black America “There is no one that comes to mind that is taking the steps to truly level the playing field.”
The nation’s largest business lobby, The Business Roundtable, unveiled its plan to fight racial injustice: form a committee.
“Consumers are watching, and they want to see commitment… and they’re not afraid to call these companies out.” Bloomberg’s Jennifer Zabasajja on Corporate America’s response to protests.
Bookshelf
While you may not find yourself in the target demographic of Minda Harts’ The Memo (What Women of Color Need to Know to Secure a Seat at the Table), now may be the perfect time to pick it up. The sales copy likens it to “Lean In for Women of Color,” but those outside of this intended audience will find value in its pages — by better understanding the challenges that women of color face in corporate life, we as colleagues can do better to support them. Harts’ book offers concrete tips on interviewing and salary negotiation, but it also contains an unflinching critique of white colleagues who fail to act as real advocates in the workplace.
She Said It Best
“There’s a whole cycle that we’re going to have to go through to reset ourselves for greatness. Because we were great before and if we want to be great, again, we’re going to have to invest like we did before. Like we were when we were a developing nation.”
— Ursula Burns, former chairman and CEO of Xerox, in conversation with Professor Modupe Akinola at Columbia Business School in 2012.
Highly recommend the entire video as a fascinating view of one of the most important executives of the 2010s.
That’s all for now.
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