Goldman Sachs Ditches Big Diversity Rule As Wall Street Backs off DEI
Goldman Sachs, one of the most prestigious investment banks on Wall Street, has recently made headlines by ditching a big diversity rule that had been in place for years. The move comes as part of a larger trend in the financial industry, with many firms backing off their commitments to diversity, equity, and inclusion (DEI) initiatives.
The rule in question was known as the “two-in-the-box” policy, which required Goldman Sachs to have at least two diverse candidates in the final pool of candidates for any job opening or promotion. This policy was put in place in 2020 as part of the bank’s efforts to increase diversity within its ranks and address the lack of representation of women and people of color in senior leadership positions.
However, in a recent internal memo, Goldman Sachs announced that they would no longer be adhering to the two-in-the-box policy, citing concerns about its effectiveness and potential unintended consequences. The bank stated that they will now focus on more holistic approaches to diversity and inclusion, rather than relying on quotas or specific rules.
This decision has sparked controversy within the financial industry, with critics arguing that Goldman Sachs is backtracking on its commitment to diversity and inclusion. Many believe that without specific policies in place, progress towards a more diverse workforce will be slow and difficult to measure.
However, Goldman Sachs is not alone in its shift away from diversity quotas. Several other Wall Street firms, including JPMorgan Chase and Morgan Stanley, have also recently announced changes to their DEI initiatives, with a focus on broader diversity and inclusion goals rather than specific rules or quotas.
These changes come at a time when the financial industry is facing increased scrutiny over its lack of diversity and inclusion, particularly in senior leadership positions. A recent study found that less than 5% of CEOs at the top 500 companies in the US are Black, Hispanic, or Asian, highlighting the need for more concerted efforts to increase representation of diverse voices in corporate America.
While some may view Goldman Sachs’ decision to ditch the two-in-the-box policy as a setback for DEI efforts, others see it as an opportunity for the bank to take a more nuanced and comprehensive approach to promoting diversity and inclusion. Only time will tell whether this shift will lead to meaningful change within the organization and the broader financial industry.