Goldman Removes DEI Language from Director Criteria, Raising Questions for Goldman Sachs BDC

Goldman removes DEI language from director selection criteria

Goldman Sachs is moving to strip explicit diversity, equity and inclusion (DEI) language from the standards its board uses to evaluate director candidates, the Wall Street Journal reports. The bank plans to delete an appended reference that currently lists “other demographics” such as race, gender identity, ethnicity and sexual orientation from a broader diversity definition that already includes viewpoints, background, work and military service. The change follows a prior decision last year to drop a diversity requirement for companies the firm takes public.

The expected amendment reflects an agreement after a September request from the conservative National Legal and Policy Center (NLPC), which owns a small stake in Goldman, people familiar with the matter tell the Journal. Sources say Goldman agrees to make the change voluntarily so the NLPC will not circulate a formal shareholder submission ahead of the bank’s annual meeting, avoiding a proxy fight. The board’s governing committee continues to evaluate candidates on four criteria, and the shift removes a specific demographic reference rather than altering the committee’s broader remit, the sources say.

The move has immediate resonance for the bank’s broader franchise, including its asset-management and business development company operations such as Goldman Sachs BDC, which operate in the private credit and middle‑market lending sector where governance standards and ESG metrics are increasingly scrutinised. Observers view the rollback as part of a wider retrenchment of DEI commitments across parts of corporate America after policy signals from the new administration that target government and contractor DEI programs. For BDCs and credit managers, the change risks prompting questions from institutional investors and advocacy groups about board composition, talent pipelines and the transparency of nomination processes even as proponents argue it refocuses evaluations on experience and independence.

Political and regulatory context

The decision comes as the White House signs executive orders aimed at curbing government DEI programs and “restoring merit based opportunity,” and administration officials publicly challenge campus and corporate diversity initiatives. That backdrop is sharpening debate among shareholders, proxy advisers and civil society groups about when demographic targets are appropriate governance tools.

Potential market and governance responses

Governance analysts say the voluntary approach to remove the language may defuse an immediate shareholder vote but is likely to spur follow‑up scrutiny. Stakeholders tracking Goldman Sachs BDC and peer firms expect renewed calls for clarity on selection criteria and for disclosure of board searches to reassure clients and limited‑partner investors about commitment to inclusive governance.