Board Diversity Initiatives – California, Goldman Sachs

Over the past decade attention to the Board role and composition has exploded, often with attention to
increasing diversity among its members.

One notable event is California’s legislative approach (9/30/2020) summarized in a post by the Harvard
Law School Forum on Corporate Governance:

In a move that continues California’s push for increased diversity on corporate boards, Governor Gavin
Newsom on September 30, 2020 signed into law a bill that requires publicly held companies
headquartered in the state to include board members from underrepresented communities. The action
follows passage of a similar law in 2018 mandating that public companies headquartered in the state
have at least one woman on their boards of directors by the end of 2019 (SB 826), with further future
increases required depending on board size. The law significantly expands on the diversity categories
included in the legislation as originally proposed. Companies that do not comply with the new law, AB
979, will face similar penalties as those noncompliant with SB 826, the gender diversity law: fines in the
six figures, in addition to ramifications to their brand and reputation. As with SB 826, the new law
contains some open questions and ambiguities that may affect implementation.

A second high profile event was the announcement by Goldman Sachs on 12/2/2021 detailed below:

From March 2022, Goldman Sachs Asset Management will expect companies in the S&P 500 and FTSE
100 to have at least one diverse director from an underrepresented ethnic minority group on their board.
It will also expand its policies to expect public companies globally to have at least two women on the
board, unless the board has 10 or fewer members or where local requirements are already higher than
this minimum. It will vote against members of the nominating committees that do not meet these
expectations, and in the United States it will continue to vote against all members of the boards that do
not include any women.