Good morning, Broadsheet readers! KBJ’s nomination will advance to the Senate floor, Ariel Investments takes a $1.3 billion stake in a product for Deaf consumers, and Goldman Sachs hits a board diversity milestone. Have a great Tuesday.
– Bank on it. It’s been two years since Goldman Sachs declared it will not to take companies public without a diverse board member. The headline-grabbing commitment is starting to bear fruit. In March, Goldman placed its 50th diverse director on a client’s board, the bank tells Fortune exclusively.
Ilana Wolfe, a career Goldman Sachs executive who in January 2020 became head of corporate board engagement, is the woman behind much of this work. She’s taken what has been an ad hoc effort to help Goldman-connected companies meet diversity standards and formalized the process as a client service.
“Goldman Sachs is uniquely positioned to actually solve the problem we’re seeing in the market,” Wolfe says. “The supply is there—there’s no shortage of talent. And the demand is increasingly there. But the market mechanism of the supply and demand meeting [has been missing].”
Wolfe and her small team spend their days meeting potential board candidates and speaking with companies seeking diverse independent directors until they can find a match. The team often learns of potential candidates from Goldman’s M&A business, and about companies in search of board members from its investment banking division.
About half of Goldman’s 50 board placements have been for companies preparing to IPO. “The initial commitment was around a certain action: we can’t take you public unless you have diversity,” Wolfe says. “But the offering to help our clients connect with diverse board talent was never limited to IPOs.”
Instead, Goldman’s match-making between board talent and vacant seats is nearly equally divided between public and private companies. The bank initially defined one “diverse director” as a woman and/or person of color. In 2021, the requirement changed to two diverse directors, one of which must be a woman. Of the 50 placements Goldman has facilitated, 92% were women and 42% were racially or ethnically diverse. About half of the new directors are first-time board members. DraftKings, restaurant software business Olo, Roblox, and ZipRecruiter are among the companies that added new members to their boards through Goldman.
Wolfe says that non-diverse boards are still common among private companies with board seats allotted to company executives and investors. Recent data supports that; 78% of high-growth businesses in 2021 didn’t have a woman of color on their boards and 40% were without any women, as I previously reported. But companies are realizing that they can’t debut on the public markets without boards that represent the communities they serve. “You wouldn’t go public without audited financials—how can you go public with such a homogenous, non-diverse board?” Wolfe asks.
As diverse board requirements become more commonplace (see: Nasdaq’s own board diversity standards), Wolfe expects Goldman’s work in this area to simultaneously become one more way to appeal to clients. In fact, she argues that approaching board placements as a client service, rather than the fee-based model utilized by search firms, might give the bank a competitive edge.
The role of the private sector in board diversity has become increasingly important as public sector efforts encounter legal challenges. California’s board diversity requirement for companies based in the state kickstarted much of the conversation around diverse board rules four years ago. But a judge struck down an additional law mandating racial diversity on boards this week in response to a lawsuit from a conservative activist group.
For Goldman, IPOs were just the beginning. “It really was an opportunity to engage our clients more broadly around the value of board diversity.”
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
The Broadsheet is Fortune’s newsletter for and about the world’s most powerful women. Today’s edition was curated by Nimah Quadri. Subscribe here.
ALSO IN THE HEADLINES
- Next steps. The Senate Judiciary Committee deadlocked along party lines in an 11-11 vote about whether to advance Judge Ketanji Brown Jackson's Supreme Court nomination to the Senate floor. Senate Majority Leader Chuck Schumer called for a vote to break the deadlock, and three Senate Republicans joined the Democrats in voting to proceed with the nomination. A confirmation vote is expected before the end of the week. CNN
- Equity investing. The private equity arm of asset manager Ariel Investments, led by co-CEO Mellody Hobson, bought a majority stake in Sorenson Communications, a video communications provider for Deaf consumers. The $1.3 billion acquisition is the first in a series of deals focused on turning minority-owned businesses into multibillion-dollar companies. Financial Times
- Sullied image. Costa Rican voters elected Rodrigo Chaves as president on Sunday. The former World Bank finance minister faced sexual harassment allegations from junior employees (a controversy that ensnared former World Bank chief and current IMF head Kristalina Georgieva). He was demoted after an investigation found a pattern of sexual misconduct, which he denied. Chaves received close to 53% of the vote. Some voters lamented Chaves’s win, calling it a shameful “international image issue” for Costa Rica. Wall Street Journal
MOVERS AND SHAKERS: Vimeo has appointed Gillian Munson as chief financial officer. Skyline Enterprises has named Jessica Carps as its new CEO. Sony Music's global podcast division hired Serita Wesley as the head of U.S. entertainment podcasts. Mixhalo hired Allison Brecklin as VP of client operations and Kristene Turner as VP of marketing. Former Salesforce SVP and assistant general counsel Wei Chen joins Infoblox. Arup appointed Fiona Cousins as the chair of the Americas region.
IN CASE YOU MISSED IT
- Sacré bleu. France’s far-right politician Marine Le Pen is making a third attempt to become the country’s president and has shot up in polls in recent weeks. On Monday, she notched her second-highest poll score ever, capturing 48.5% of voter intentions in an opinion poll of a likely runoff against French President Emmanuel Macron. Macron is still favored as the likely winner. New York Times
- Family ties. Kim Yo-jong, sister of North Korean leader Kim Jong-un, called South Korean defense minister Suh Wook a "scum-like guy" after he spoke about making preemptive strikes against North Korea. Kim Yo-jong warned that the South could face a "serious threat." She has been an influential adviser in the North Korean regime and is considered to be her brother's No. 2. Guardian
ON MY RADAR
The abortion underground The Atlantic
The evolution of Zazie Beetz The Cut
What the student loan payment pause has meant to Black women Washington Post
PARTING WORDS
- Labor activist and executive director of the National Domestic Workers Alliance Ai-Jen Poo on how connecting with others in the field helps domestic workers feel less isolated.
This is the web version of The Broadsheet, a daily newsletter for and about the world’s most powerful women. Sign up to get it delivered free to your inbox.
