As Goldman Sachs Group Inc moves to increase diversity on corporate boards, the investment bank is not extending the initiative to a particularly challenged region: Asia.
Chief executive officer David Solomon revealed last week that starting in July the bank would not handle initial public offerings (IPOs) for companies that lack either a female or “diverse” director.
However, the rule applies only to IPOs in the US and Europe. Asia’s exclusion is striking, given how common all-male boards are in the region. Other bastions of male dominance, including Latin America and the Middle East, also went unmentioned.
A Goldman spokeswoman said that the bank will consider implementing the plan in Asia and other regions over time after consulting with its clients, as diversity awareness improves in those areas.
“Nowadays there’s no excuse for companies to have non-diverse, all-male boards,” said Fern Ngai, CEO of Community Business, a Hong Kong-based group that advocates for responsible and inclusive business practices. Goldman “should include Asia. I don’t see why they don’t.”
On Thursday, Solomon issued the latest ultimatum from Davos that Wall Street’s biggest underwriter of IPOs in the US will no longer take a company public in the US and Europe if it lacks a director who is either female or “diverse.”
The mandate is the latest in a series of signals that non-diverse boards and management are unacceptable. BlackRock Inc and State Street Global Advisors are voting against directors at companies without a female director. Public companies with all-male boards based in California now face a US$100,000 fine under a new state law.
Asia lags behind not just the US and Europe, but also global leader Africa in the proportion of women on company boards, McKinsey Global Institute reported late last year.
A study by index provider MSCI Inc of companies in its global benchmarks last month showed about 33 percent of firms in Japan had no female board members, one percentage point worse than China and Hong Kong.
By comparison, that figure was 1 percent in the US, while it was 94 percent in Saudi Arabia.
Recent high-profile IPOs in Asia showed a paucity of female representation, with no women on the boards of Xiaomi Corp (小米) and Meituan Dianping (美團點評), which raised almost US$10 billion combined in 2018.
Goldman had a leading role in both those offerings.
The bank was the biggest underwriter of IPOs in the US and Europe last year.
It had a more modest market share in Asia, coming in 19th, according to Bloomberg league tables.
Goldman was an adviser on 86 IPOs last year, ranking sixth globally among underwriters.
In May last year, Hong Kong’s stock exchange issued a non-binding guidance letter to new IPO applicants, asking them to disclose their board-diversity policies and give an explanation if their directors are all of a single gender.
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