Goldman Sachs (GS) , the fifth largest bank in the U.S., has landed in a web of controversy that is currently reshaping corporate America.
In 2020, a plethora of large companies vowed to commit to diversity, equity and inclusion in their workplaces after the murder of George Floyd unveiled the many inequities Black people face in America. However, many companies are starting to switch gears.
Last year, large companies such as Walmart, Lowe’s, Harley-Davidson, etc., abruptly cut their DEI policies after facing pressure from conservative consumers to do so. The decision also follows the U.S. Supreme Court’s ruling in 2023 to end affirmative action in college admissions, which raised legal questions about DEI programs in workplaces across the country.
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So far this year, Meta, Amazon and McDonald’s also hopped on the growing trend of putting DEI on the chopping block. However, some companies are opting to defend the controversial policy despite opposition from some consumers and shareholders.
Goldman Sachs takes a bold stanceÂ
Goldman Sachs is the latest company to stand firm on DEI, according to a new report from The Wall Street Journal.
The bank, along with JPMorgan Chase, Bank of America and Citigroup, have recently been targeted by activist groups such as the National Center for Public Policy Research (NCPPR), the National Legal and Policy Center (NLPC), and the Heritage Foundation to cut their DEI policies.
A person walks towards Goldman Sachs headquarters in New York, US, on Thursday, July 6, 2023.Â
All three groups are shareholders of all four banks. According to the Journal, the NCPPR has sent a proposal to Goldman Sachs ahead of the bank’s annual shareholder meeting this spring that calls on the company to conduct an audit of its DEI policies, searching for racial discrimination.
The group highlights Goldman Sachs’ DEI policies, such as a requirement for the bank to help companies that have at least two diverse board members go public in the U.S. and Western Europe. It also flags a policy that requires Goldman Sachs to invest $10 billion in businesses and organizations that benefit Black women.
The bank also allegedly has “inclusion networks” that are based on race and has set hiring targets for Black vice presidents in the U.S. and the U.K.
Related: Walmart shareholders fire back at controversial policy change
The NCPPR argues that Goldman Sachs’ DEI policies can put shareholders in expensive legal trouble, such as lawsuits from employees who may allege the policies are discriminatory,
In response to the proposal, which Goldman Sachs shareholders will vote on at their annual shareholder meeting, a spokesperson for the bank told the Journal in a statement that the company believes that organizations can benefit from diversity in the workplace and will remain committed to its DEI policies and programs in compliance with the law.
More companies are defending DEIÂ
The stern defense from Goldman Sachs comes after Apple and Microsoft also defended their DEI policies from opposition earlier this month.
Costco (COST) also recently doubled down on its DEI policies after a group of its shareholders, who are also part of the NCPPR, sent a similar proposal urging the retailer to axe its DEI policies due to legal concerns.
The group flagged in the proposal that Costco’s DEI program employs a chief diversity officer, contains a supplier diversity program that “picks suppliers based on their race and sex,” influences hiring and promotion choices and sends shareholder money to organizations that support DEI.
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The NCPPR states in its proposal that these DEI policies hold “litigation, reputational and financial risks to the company.”
In response, Costco’s board of directors sent a notice to shareholders urging them to vote against the proposal in the company’s annual shareholder meeting on Jan. 23, stating that its DEI policies are “legally appropriate.”
“Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our company the importance of creating opportunities for all,” said Costco’s board of directors in the notice. “We believe that these efforts enhance our capacity to attract and retain employees who will help our business succeed.”
The move from Costco sparked mixed reactions from consumers, with some threatening to boycott the company as a result of its stance on DEI.
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