Perhaps the first widely publicized hint that U.S. banks were serious about distancing themselves from diversity, equity and inclusion initiatives they had embraced in recent years came early this month, when Goldman Sachs walked back a 4-year-old policy that barred it from taking public any companies with all-male, all-white boards.
"That policy was put in place to try and drive a change in behavior and I think that's happened," Richard Gnodde, CEO of Goldman Sachs International, told the BBC this month. “I think it has served its purpose."
Tony Fratto, a spokesperson for the bank, said at the time: “We continue to believe that successful boards benefit from diverse backgrounds and perspectives, and we will encourage them to take this approach.”
Fratto attributed the retreat to “legal developments,” which went unnamed but undoubtedly were a reference to President Donald Trump’s day-one executive order blasting DEI initiatives, which he labeled “illegal and immoral discrimination programs.”
In the less than three weeks since Goldman rolled back its board-diversity requirement, all of the six largest U.S. systemically important financial institutions – and super-regionals, too – have issued annual filings de-emphasizing their previous DEI efforts. That was capped Thursday, when the last of those SIFIs – Goldman Sachs – filed its own 10-K.
Missing, compared with last year’s annual filing, are entire sections – one previously labeled “diversity and inclusion,” and another outlining “aspirational goals” in the composition of the banks’ slate of partners and managing directors.
"We have made certain adjustments to reflect developments in the law in the U.S.," Goldman CEO David Solomon said in a statement Thursday. “We strongly believe that merit and diversity are not mutually exclusive. Our people are a powerful example of that, and that’s why we will continue to focus on the importance of attracting and retaining diverse, exceptional talent."
In its filing Thursday, Goldman said its “aspirational hiring and representational goals” were five-year initiatives set to expire in 2025. Specifically, the bank in 2020 aimed for women to represent 40% of its vice presidents by this year, and for Black and Latino people to comprise 7% and 9%, respectively, of U.S. vice presidents by 2025. The bank also wanted 50% of its analyst and associate hires to be women, 11% of its hires at those levels in the U.S. to be Black, and 14% Hispanic/Latinx.
The bank, in last year’s filing, reported falling short on each of those goals but in some cases by just a percentage point. This year’s filing offers no such breakdown but an acknowledgment.
“We are proud of the progress we have made,” the bank wrote in Thursday’s filing. “We will continue to develop programs consistent with our fundamental commitment to inclusive merit-based promotion and in compliance with the law.”
In its most basic diversity-related statement in last year’s filing, Goldman wrote: “We believe diversity, including diversity of experience, gender identity, race, ethnicity, sexual orientation, disability and veteran status, in addition to being a social imperative, is vital to our commercial success through the creativity that it fosters.”
This year, that became: “We believe that the diversity of our workforce, including diversity of perspectives, enhances our performance-based culture and is critical to our commercial success.”
The about-face in DEI (de-)emphasis may feel abrupt. Just three months ago, when Goldman named its 95 new partners, the bank prominently touted the proportion of women and ethnically diverse members of the class. (Incidentally, Goldman saw decreases in new women and Black partners from 2022.)
DEI may not appear as front-and-center in Goldman materials as it once did, but it’s still there. Web pages titled “Making Progress Towards Racial Equity” and “When Women Lead” now guide users to the umbrella page “Our People and Leadership.” But the page for Goldman’s decade-long pledge to invest $10 billion to address gender and racial biases felt by Black women still exists.
Moreover, Solomon’s statement that Goldman “will continue to focus on the importance of attracting and retaining diverse, exceptional talent" may be the boldest yet from a bank newly adhering to Trump administration pressure.
On Tuesday, when Bank of America issued its own 10-K, in which it also de-emphasized DEI, CEO Brian Moynihan told The Economic Club in Washington: “We have diversity and inclusion at our company … But, step back: we’ve always been the bank of opportunity.”
Incidentally, the section of Bank of America’s filing that last year was labeled “Diversity and Inclusion” is now titled “Talent, Inclusion and Opportunity.”
Citi, the first major U.S. bank to report unadjusted pay gap data by gender and the first Wall Street bank to hire a woman CEO, also took a surprising step back.
“It is important to note that we’re living in an environment where things are changing quickly,” CEO Jane Fraser wrote in a memo last week noting that the bank was dropping “aspirational representation goals” and a diverse-slate hiring requirement. “The recent changes in U.S. federal government policy, including new requirements that apply to all federal contractors, call for changes to some of the global strategies and programs we’ve used to attract and support colleagues from various backgrounds.”
JPMorgan Chase CEO Jamie Dimon castigated some of his bank’s DEI efforts at a recent town hall, saying, “I saw how we were spending money on some of this stupid sh-t, and it really pissed me off. I’m just going to cancel them. I don’t like wasted money in bureaucracy.”
However, he has since clarified that JPMorgan is "still going to reach out to the Black, Hispanic, LGBT, veteran, disabled communities.”
"We're not changing that," he said.
