Goldman’s board kills DEI — and that’s not a terrible thing

The board of Goldman Sachs recently updated its governance policy, removing formal DEI criteria from director selection. Other major banks, including JPMorgan Chase, Wells Fargo, and Morgan Stanley, have made similar adjustments.

The headlines frame this as a retreat from diversity. A more important question is whether it creates space for a broader and more practical conversation about what kind of diversity boards actually need.

The original premise of diversity initiatives grew out of mid-20th century civil rights legislation and affirmative action policy. At its core, the idea was straightforward: widen the aperture to access the largest possible talent pool and incorporate broader perspectives into consequential decisions. In theory, bringing together individuals with different lived experiences and viewpoints should strengthen oversight of strategy, growth, risk management, and market positioning.

That core objective remains sound. The challenge is whether current board composition practices—across industries—truly reflect the full range of perspectives necessary to understand future customers and market trends.

If directors largely share similar educational pedigrees, career paths, age brackets, and socioeconomic backgrounds, they are more likely to see similar opportunities and miss similar risks. That is not a demographic critique; it is a governance risk.

The real question is not whether diversity matters. It is: how do we get the broadest and most relevant set of experiences into our boardrooms?

Consider the disconnect between many public company boards and the broader U.S. workforce and consumer base.

Roughly 70% of American workers are classified as frontline or essential workers. White-collar professionals represent closer to 30% of the workforce. Yet corporate boards are overwhelmingly composed of former executives and financial professionals. Blue-collar and frontline perspectives—despite representing the majority of workers and customers—are rarely present in the boardroom.

Generational representation reveals a similar imbalance. The average age of public company directors is approximately 61–63. Directors under 40 held just 0.3% of board seats in 2023. There is virtually no Gen Z representation. Meanwhile, Millennials and Gen Z now drive cultural trends, digital engagement, and long-term consumption patterns. They are born digital. Their decision criteria, brand loyalty triggers, and communication preferences differ materially from those of Gen X and Boomers. If boards lack meaningful generational representation, how confident can they be in their understanding of the next decade’s customer base?

International exposure is another overlooked dimension. Many U.S. companies derive roughly 40% of revenue from international markets. Yet only about 18% of directors are non-American. As growth increasingly depends on Europe and Asia, global market fluency becomes more than a résumé line item—it becomes a strategic asset.

Educational and socioeconomic concentration is equally notable. A disproportionate number of directors come from Ivy League or similarly elite institutions, even though less than 1% of U.S. undergraduates attend Ivy League schools. Approximately a quarter of directors have elite university backgrounds. Only about 15% are entrepreneurs; most are career corporate executives.

None of these statistics suggest that traditional board profiles lack merit. Many directors bring extraordinary experience. But the cumulative effect can be a narrowing of perspective. Governance committees often refresh boards by selecting candidates they know, trust, and relate to—frequently from similar professional and educational networks.

If the objective is true diversity of thought, boards might broaden their skills matrices to consider additional dimensions: generational cohort, frontline operating experience, entrepreneurial background, international market leadership, digital-native fluency, and non-elite educational pathways. These attributes may not fit neatly into traditional demographic categories, but they can meaningfully affect strategic judgment.

The financial consequences of misreading customer sentiment underscore the stakes. The recent controversies involving Bud Light and Target illustrate different forms of customer disconnect. In one case, a marketing pivot alienated a core consumer base; in another, a policy reversal triggered backlash from loyal customers. In both situations, market value declined sharply and leadership faced significant fallout.

These episodes were not simply communications failures. They reflected deeper miscalculations about customer identity, brand alignment, and stakeholder expectations. When boards lack a representative “customer perspective,” strategic decisions can inadvertently erode trust and long-term value.

Board Diversity’s goal should be to de-risk the future of our enterprises and maximize their opportunities. Avoiding corporate speak, group think, and bringing the best minds from the broadest background is the way to have the best thinking and business judgement for the shareholders. Goldman Sachs’ brave governance committee move to remove DEI policies is a great step towards rethinking inclusion based on the broadest talent pool. 

As boards evaluate refreshment and succession planning, they might ask a more expansive question: Where will the new ideas for the next five to ten years come from? If future growth depends on younger consumers, global markets, digital ecosystems, and economically diverse customers, board composition should reflect that reality.

The goal is not to abandon diversity, but to widen the definition—so that the boardroom better mirrors the complexity of the marketplace it serves.

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