David Solomon, CEO of Goldman Sachs Group Inc., was looking forward to celebrating his achievements. On Friday, he shared his annual letter to shareholders, highlighting the successes of his five-year leadership: a 50% increase in book value per share, a 130% rise in stock price compared to about 60% for peers, and a quarterly dividend that has more than tripled. He proudly mentioned that the firm had surpassed its goal by raising over $250 billion in alternative assets under management a year ahead of schedule. However, just days prior, the Wall Street Journal published a critical investigation into the lack of progress for women at the firm. The report revealed that approximately two-thirds of the women who were partners at the end of 2018 have either left the company or no longer hold that title, and currently, no women lead a major division or are considered viable candidates to succeed Solomon. A Goldman spokesperson stated that partner departures are consistent with historical trends.
On Monday, it was announced that Stephanie Cohen, one of the two women with a revenue-generating role on the firm’s 25-person management committee, is leaving to join Cloudflare Inc., while the other, Beth Hammack, has already announced her departure. Solomon has taken “swift, decisive action to refocus the firm’s strategy” regarding its core businesses, as he noted in his letter. However, the same urgency has not been applied to addressing the issue of women’s representation at Goldman. When Solomon became CEO, he emphasized the importance of promoting women into senior leadership roles. Now, five years later, he acknowledges to the WSJ that “advancing women into our most senior ranks is an area where we have not accomplished our goals,” and that the firm’s “longer term success” hinges on it. This raises a pertinent question: If Solomon believes that diversifying the top ranks is essential for success, why has he not found a solution? He has the resources and determination to address other business areas, yet female partners have reported to the WSJ that they have seen minimal progress in advancing women to top positions.
Mellody Hobson, co-CEO of Ariel Investments and a prominent advocate for diversity, equity, and inclusion, often quotes her husband, George Lucas, or rather the words he penned for Yoda, regarding diversity issues: “Do or do not — there is no try.” Hobson, who also serves as board chair of Starbucks Corp. and a director at JPMorgan Chase & Co., elaborates that “every other thing we do gets measured.” She emphasizes that in this area, companies often seek credit for merely attempting to improve, whereas in other aspects, such as meeting earnings expectations or delivering products on time, success is not measured by intent but by results.
