An Open Letter to David Solomon at Goldman Sachs
Mr. Solomon:
I wanted to take a moment to applaud your recent announcement to not take a company public without at least one diverse member. I know you are taking a risk with this initiative and we need success partners like you to lead. I’m concerned, however, that it will not work and could actually make board diversity worse. Please consider the following:
First, both gender and ethnic diversity have been lumped together in your proposal. This does not allow a focus on both, which is critical to successful companies. Your own board is a standout in diversity, so you have experienced this success first hand.
Second is the issue of tokenism. When you are the only “diverse” person of a certain color or gender at a table with all white men, the chance that your voice will be heard is small. According to Vicki W. Kramer, lead author of "Critical Mass on Corporate Boards,” when there is only one diverse person, she becomes both hyper-visible and invisible at the same time. She is likely to be asked for “the woman’s perspective” or her contributions are ignored entirely because there is no one else there to back up her experience. In addition, wherein a group of 10-12 men, you are likely to consider a few men less capable than others and even like some more or less than others, when there is only one woman or a person of color that person becomes all those things. If she is not perfect in every way, not only she will suffer, but for the some, it will have the power to confirm the negative bias they already have. This is detrimental to the entire team and obviously, to the individual. The worst-case outcome is a board becomes less diverse because the individuals who represent diversity end up leaving. A minimum of three women seems to be the key to the success of both the board and the women themselves. I know you plan to increase the number of diverse members to two in 2021, but that is a bare minimum to start with.
I offer you some potential solutions to make your initiative better. Postpone implementation of your proposal from June 2020 to June 2021. Use the next year to:
Separate gender and ethnic diversity. You should demand and create a plan for both.
Ensure that the board and leadership of your companies go through robust diversity and inclusivity training.
Work with the companies in your pipeline to identify, recruit, support, and train women and underrepresented individuals who will join the board. There are many organizations that focus on getting women into board roles. They have a large network, so the pipeline excuse becomes invalid. Through my role, I meet numerous CEO-ready women every week who could also make excellent board members, so I know these women are out there.
Set term limits for board members to make way for diverse candidates, but most importantly new and innovative ideas and solutions.
Commit to not taking public a company with a board that does not have two women and two ethnically diverse individuals.
In addition, these companies must also commit to adding at least one more woman or ethnically diverse individual onto the board in the following 18 months.
Ensure that there is a program in place so that the board is always recruiting, looking past titles and at competencies, setting milestones to meet with a certain number of people monthly. And most importantly, make sure everyone knows why board diversity is critical to success.
Ensure diversity in the executive team as well as the board.
Treat diversity like a business imperative, because it is. Publicly set diversity targets and metrics. Reward leaders for meeting their goals.
Baby steps are for babies. Big, bold steps are for people like you, Mr. Solomon. Please take this one.
With deep respect,
Luann Abrams