When Activism Meets Anti-DEI Momentum

Goldman Sachs Inc. (GS) is preparing to strip diversity considerations from how it picks board members, marking another high-profile retreat from corporate diversity commitments. According to The Wall Street Journal, the investment bank will eliminate factors like race, gender identity, and sexual orientation from its board selection criteria, with approval expected later this month.

The catalyst? A shareholder proposal from the National Legal and Policy Center, a Virginia-based conservative activist group that holds a small stake in Goldman. Last September, NLPC submitted a proposal demanding the bank drop its diversity, equity, and inclusion criteria from board selection. Rather than fight it out at the annual meeting, Goldman agreed to make the changes, and NLPC withdrew its proposal. Both parties formalized the deal in a signed agreement.

The board's governance committee is set to approve the revised language this month, essentially making it official.

One Million Black Women Program Gets a Makeover

Goldman isn't stopping with board selection. The firm also updated its One Million Black Women initiative, which launched in 2021 to address opportunity gaps for Black women across various industries. The revisions remove race-specific language and eliminate the requirement that companies in the U.S. and Western Europe maintain diverse boards before Goldman will take them public.

It's a notable shift for a program that was explicitly designed around racial equity just a few years ago.

The Trump Effect on Corporate DEI

White House Press Secretary Karoline Leavitt celebrated Goldman's move on X, positioning it as part of President Donald Trump's campaign against what the administration calls "woke" corporate policies. And she's not entirely wrong about the broader trend.

Since Trump issued an executive order in early 2025 directing federal agencies to investigate corporate DEI programs, Wall Street has been methodically backing away from diversity commitments. A U.S. appeals court later allowed the administration to temporarily enforce a ban on DEI programs within federal agencies and businesses with government contracts, which accelerated the corporate exodus.

The impact has been substantial. Companies like Coca-Cola (KO) have warned that a shortage of diverse talent could actually hurt their business operations, but the political headwinds have proven difficult to ignore.

California Charts a Different Course

While Goldman retreats, California is charging in the opposite direction. Starting March 1, venture capital firms operating in California must submit annual demographic reports to the Department of Financial Protection and Innovation under the state's "Fair Investment Practices by Venture Capital Companies" law.

This isn't a voluntary disclosure program. Firms that don't comply face penalties up to $5,000 per day, which adds up quickly if you're trying to wait out the political climate.

The contrast couldn't be sharper: federal pressure pushing companies away from diversity tracking, state law requiring detailed demographic reporting. For firms operating nationally, it's becoming a complicated balancing act between different regulatory expectations and political environments.