Hobnobbing with some of the biggest names in business in Davos, Goldman Sachs CEO David Solomon said that beginning this summer, Goldman would not take a company public without at least one diverse candidate on the board of directors, with a focus on women.
While many are praising Solomon and the bank for this initiative, I am concerned about using quotas for boards—or anywhere, for that matter.
I, myself, am a “recovering” investment banker, have been a public company director and currently serve on the board of a private technology company. I believe that diversity is a good and important factor for corporate governance and otherwise, but quotas make me uncomfortable.
The reason diversity is important and valuable is because it ensures that a variety of perspectives, experiences, networks and thought processes are included in the company’s management or governance. This ostensibly gives companies a richer pool of information to draw from and more thoughtful outcomes for their customers and other stakeholders. But, what is diversity? Is it gender, skin color, sexual orientation or other immutable characteristics, or is it diversity of opinion and experience? How is this measured and accounted for? Having diversity to check a box is in polar opposition to the intention and benefit it is supposed to create.
Second, as a woman on boards, does this help me or hinder me in doing my job? Being perceived as a token hire anywhere can be devastating for doing your job well and this is particularly the case on corporate boards. How do you earn the trust of the other directors, build consensus and generally get taken seriously if it is perceived that you are there based not on experience, but because you check a box?
What I would suggest, instead, to Goldman Sachs and others who want to help in this area is to make relevant introductions. I am a member of WomenCorporateDirectors, who represents thousands of women who have board experience. We receive notification of board openings, but there are usually only a couple that pop up per month, for thousands of qualified candidates. Make the introductions, so that we equalize opportunities and then let us earn the positions on merit.
Additionally, talk to your clients about the profiles they create for director candidates. If your search only includes people with C-level or P&L experience, for example, you will inevitably be missing other candidates who have had different professional paths, but who are qualified to be a director and bring that diversity of experience to the table.
It’s great that Goldman Sachs wants to make an impact in an important area, but I urge them to focus on more equality in opportunities, instead of trying to focus on rigging equal outcomes. Provide the access, but ultimately, let everyone compete on merit—that’s best for the directors, company and shareholders.
Carol Roth is the creator of the Future File legacy planning system, a “recovering” investment banker and host of "The Roth Effect" podcast.