Impact of Goldman Sachs' diversity commitment on gender diversity on boards of directors

This paper examines the impacts of Goldman Sachs' July 2020 commitment to underwrite IPOs with at least one diverse board member, specifically focusing on gender diversity. The research was conducted through a review of all IPO transactions from January 10, 2012, through September 1, 2021. The analysis included two levels of differentiation: first by the IPO underwriter and second by whether the company was publicly listed before or after July 2020. The data found an increase in the size of boards of directors and an increase in gender diversity over the same time period, as well as a correlation of decreased gender diversity with increased book-to-market value of a company.

IMPACT OF GOLDMAN SACHS’ DIVERSITY COMMITMENT ON GENDER DIVERSITY ON BOARDS OF DIRECTORS by Sabah Sial A Senior Honors Thesis Submitted to the Faculty of The University of Utah In Partial Fulfillment of the Requirements for the Honors Degree in Bachelor of Science In Finance Approved: _____________________________ Matthew Ringgenberg Thesis Faculty Supervisor _____________________________ Michael Cooper Chair, Department of Finance _______________________________ Matthew Ringgenberg Honors Faculty Advisor _____________________________ Sylvia D. Torti, PhD Dean, Honors College May 2022 Copyright © 2022 All Rights Reserved 2 ABSTRACT This paper examines the impacts of Goldman Sachs’ July 2020 commitment to underwrite IPOs with at least one diverse board member, specifically focusing on gender diversity. The research was conducted through a review of all IPO transactions from January 10, 2012, through September 1, 2021. The analysis included two levels of differentiation: first by the IPO underwriter and second by whether the company was publicly listed before or after July 2020. The data found an increase in the size of boards of directors and an increase in gender diversity over the same time period, as well as a correlation of decreased gender diversity with increased book-to-market value of a company. Keywords: initial public offering, gender diversity, board of directors, return on equity, book-tomarket value 3 TABLE OF CONTENTS Table of Contents ABSTRACT.................................................................................................................................... 2 TABLE OF CONTENTS ................................................................................................................ 3 INTRODUCTION .......................................................................................................................... 4 The Current State of Gender Diversity...................................................................................................... 4 Public Efforts to Increase Gender Diversity.............................................................................................. 6 Private Efforts to Increase Gender Diversity ............................................................................................ 7 METHODOLOGY ....................................................................................................................... 10 Data Collection ........................................................................................................................................ 10 Levels of Differentiation ......................................................................................................................... 11 Data Analysis .......................................................................................................................................... 12 RESULTS ..................................................................................................................................... 14 Metrics & Analysis for Underwriters ...................................................................................................... 14 Metrics for Date....................................................................................................................................... 17 Analysis of Date ...................................................................................................................................... 17 CONCLUSION ............................................................................................................................. 20 References ..................................................................................................................................... 22 4 INTRODUCTION An initial public offering (IPO) can be judged on a laundry list of metrics: first-day returns, first-year returns, money left on the table, and various other quantitative measurements indicating the extent of success in raising capital for a company being publicly listed. Among these metrics is a lesser-known measure: the gender diversity of the board members of the company. While gender diversity is not in itself a financial metric like those mentioned above, it is nonetheless a reflection of the diversity of perspectives represented at the company’s highest decision-making level and a helpful indicator of where a company is positioned among its competitors. Although gender diversity has historically lagged on the boards of publicly listed companies, public and private actors are taking up the cause. Notably, Goldman Sachs, the most prominent underwriter of IPOs by an array of measures, continues to make public commitments to gender diversity as a consideration for the companies it chooses to underwrite. This paper investigates the extent to which the commitment by Goldman Sachs is related to the trend in gender diversity, as well as how other prominent IPO underwriters compare. The Current State of Gender Diversity Within the bounds of the legislation and commitments discussed in this paper, gender diversity is defined as “the Director’s self-identification of gender ‘regardless of their designated sex at birth’” (Hatcher & Latham, 2020). As such, gender diversity in the data reflects the proportion of the board of directors comprised by women. It is important to note that the Goldman Sachs commitment discussed in this paper requires a “diverse board member,” without specifying gender as a requirement for diversity. This paper focuses on gender as a metric for diversity, which is supported by the de facto impact of companies aiming to increase diversity. 5 As Stephanie Creary, an assistant professor of management at the University of Pennsylvania’s Wharton School, points out, “Most of the gains that [companies have] made are focused on gender diversity…All other forms of diversity—including racial diversity and ethnic diversity— are lagging significantly behind the push to increase gender diversity on boards” (Adams, 2020). While other forms of diversity are important factors for corporate boards of directors, they are beyond the scope of this paper. Empirically, the proportion of women on boards of directors has lagged that of men. According to a 2020 report by Deloitte, a consultancy, about 28.2% of board seats of Fortune 100 companies are occupied by women (“Missing Pieces Report,” 2021). This number is likely an overestimate of women being represented on boards, as there is a high level of overlap in the diverse board members among companies. The same report by Deloitte points out, “Nearly 36% (more than one-third) of diverse board seats are occupied by persons on multiple Fortune 500 boards…In fact, we may be underestimating the ‘overreliance’ on these board members, as we are not accounting for their board seats outside the Fortune 500” (“Missing Pieces Report”). Thus, metrics estimating the proportion of women being represented on boards are not absolute and must be considered in the context of multiple board seats being held by the same individuals. While the report above considers gender diversity for the boards of Fortune 500 and Fortune 100 companies, the metrics for gender diversity are even lower for companies nearing an IPO. Among such companies, only 18 percent of seats are held by women (McGregor, 2020). The causes for the disparity between the Fortune-level companies and companies nearing an IPO are beyond the scope of this paper but are nonetheless helpful in pinpointing a critical issue in the lifetime of a company. The IPO stage for a company is an important turning-point, as it allows the company to access a much wider range of capital. It also opens the company up to a 6 wider range of scrutiny, both from regulators and from investors. The notable absence of women from this point in the process underscores the need for measures to increase gender diversity on corporate boards. Public Efforts to Increase Gender Diversity The issue of gender diversity on corporate boards receives wide attention from both public and private actors. In fact, the move to increase gender diversity for companies began with public agencies and state legislatures. Such commitments are usually incremental and can range from mandates for inclusion of gender diversity to disclosure of gender diversity. In September 2018, California required that each corporation covered by state law have at least one woman director by the end of 2019. Since the end of 2021, each company is required to have a predetermined number of women directors based on the size of the board. All companies covered by the law must disclose the total number of directors and the number of women directors (Hatcher & Latham). The requirements are backed by significant monetary policies and fines for non-compliance with the requirements. California was the first state to feature gender diversity so prominently in its requirements and to mandate it, but multiple other states have also made efforts to increase gender diversity. In 2017, Colorado urged companies to “have a minimum number of female directors depending on the size of the board…This was a non-binding Resolution and did not impose disclosure requirements” (Hatcher & Latham). Other states, such as Maryland and Illinois, have also made similar recommendations by requiring disclosure of gender diversity rather than mandating it. Public actors have therefore been instrumental in recognizing the importance of gender diversity but attempts to increase diversity vary in their mechanism. 7 Additionally, of the states that have passed legislation to increase gender diversity, one state is notably missing. Delaware is the location for 93% of all US initial public offerings and domicile for about 68% of Fortune 500 companies (“2022 Annual Report”). Known for having a specialized legal system for businesses, Delaware is an attractive location for companies to incorporate. The state leaves the choice of mandating gender diversity to the companies themselves (Simmerman et al., 2019). Given the significant share of companies that incorporate in Delaware, the legislation passed by other states is watered down in its impact. It is important to look towards private actors, in this case, who have a greater enforcement mechanism in the IPO process. Private Efforts to Increase Gender Diversity Efforts by private actors to increase gender diversity on corporate boards is a relatively new occurrence. In this case, some of the most influential private actors are the investment banks which underwrite and advise companies in the IPO stage. This is due to the intricacies of taking a company public through an IPO. In a process full of uncertainty around market pressure and securities pricing, it is important for companies to have an underwriter they can rely on. As such, underwriter rankings are especially important. One of the highest ranked banks based on a variety of underwriting metrics, Goldman Sachs, has recently been particularly influential in making public commitments to gender diversity. In February 2020, Goldman Sachs’ CEO David Solomon stated, “Effective July 1, Goldman Sachs will only underwrite IPOs in the US and Europe of private companies that have at least one diverse board member. And starting in 2021, we will raise this target to two diverse candidates for each of our IPO clients” (“Goldman Sachs’ Commitment,” 2020). The statement 8 remediated two of the obstacles facing the legislative efforts to increase gender diversity: scope and enforcement. First, it vastly increased the reach of companies impacted. Under the legislative efforts, a significant portion of corporations were not under any legal obligation to attempt to increase gender diversity or report their metrics in such areas, as they were incorporated in Delaware. Conversely, Goldman Sachs has consistently been the top IPO underwriter for US IPOs, with a 2022 report by Barron’s finding, “Goldman Sachs Group…remained the top advisor for US initial public offerings last year. The investment bank worked on 147 traditional IPOs in 2021, valued at $16.2 billion” (Beltran, 2020). Companies wanting to go public often considered Goldman Sachs as an advisor and were thus more likely to fall under the requirement for at least one diverse board member. Second, Goldman Sachs has much more enforcement power over its own mandate than state legislation. In many cases, the legislation was not mandated, but provided guidance for increasing gender diversity. In other cases, the legislation itself only required the disclosure of gender diversity of corporations, rather than providing a mechanism for increasing said diversity. Goldman Sachs, on the other hand, had considerable power in the IPO process as one of the highest-ranking underwriters. As a private company, it had the option to refuse to act as an advisor to a company if the company didn’t align with the bank’s commitment to diversity. Public actors and legislation did not have this option. Goldman Sachs is not alone in considering gender diversity in its business decisions. Other finance firms, such as BlackRock Inc. and State Street Global Advisors, are voting against boards without any female directors (“No Women?”, 2020). However, no comparable underwriters have made similar commitments to gender diversity. Part of this likely has to do 9 with the monetary costs of making such a commitment. According to a 2020 analysis by Bloomberg Law, “Goldman Sachs could have lost up to $101 million in underwriting fees from as many as 18 US IPOs had the policy been effective in 2019. $101 million represents nearly one-third of the $318.68 million in advisory fees Goldman earned from the 59 US IPOs it underwrote last year” (“Analysis: IPO Diversity”, 2020). As mentioned above, Goldman Sachs in fact remained the top IPO underwriter in 2021 and outperformed its competitors on the metric of underwriting fees generated. Although this must be viewed in the context of the market-wide boom in IPOs in 2021, it is an early indication that Goldman’s public commitment to gender diversity has not materialized in the types of losses expected in 2019. Despite the relative lack of effective legislation in increasing corporate gender diversity, the trend of gender diversity has been improving. A 2019 report by Institutional Shareholder Services found, “The percentage of women joining boards reaches a new record high, with 45 percent of new Russell 3000 board seats filled by women in 2019 (compared to only 12 percent in 2008) and 19 percent of all Russell 3000 seats held by women” (Papadopoulos, 2019). The significant percentage of new seats comprised by women should be viewed in context of the overall increase in the size of boards of directors, which the report states have also increased over the same time period that the metrics reflect. As such, this paper investigates the trend in gender diversity alongside the trend in the size of corporate boards. 10 METHODOLOGY Data Collection Data on initial public offerings was gathered through the Thomson Reuters database for all IPO transactions between January 10, 2012, through September 1, 2021. Given that one of the factors being tested in this paper is the impact of a July 2020 announcement, there was much more data available for the first portion of the timeframe (before July 2020) than for the second portion (after July 2020. This relative imbalance in data availability was mitigated by the fact that the year 2021 saw a record number of IPOs compared to previous years. From the years 2012-2019, the average IPOs per year were 183, with the highest being 268 in 2014 and the lowest being 100 in 2016. In contrast, the year 2020 saw 431 IPOs and the year 2021 saw 951 IPOs. Thus, the sample sizes for IPOs were about 1,682 and 1,166 before and after July 2020, respectively (“Number of IPOs”, 2022). The imbalance was therefore alleviated and was not considered as a significant factor in this analysis. The data points of note from the IPO data include the following: stock ticker symbol, IPO offer date, offer price, first-day closing price, bookrunner, and all managers. In addition to the IPO data itself, relevant ratios were found for each IPO, including the Book/Market ratio (B/M) and the Return on Equity (ROE) for each of the fiscal quarter end dates for the stock. These were used to identify long-term trends in financial performance of each IPO. Finally, the gender ratio and the total number of directors at each of the fiscal quarter end dates was also calculated for each stock. The total number of directors was important to consider in tandem with the gender ratio, as the trends analyzed in the Introduction indicate that the overall size of boards of directors has been increasing and has therefore impacted the gender ratio of each board. Gender ratio in this analysis reflects the ratio of men to women; a ratio of 1 indicates that the board is 11 comprised of 100% men and 0% women. As such, a declining gender ratio is reflective of an increase in gender diversity. An example of the relevant data points for stock for the company Acacia Communicata (ticker: ACIA) is shown in Figure 1. Figure 1: Relevant data points for stock ACIA % change in number of % change in gender Gender ratio directors ratio 12/1/16 - - 1 12/1/17 12.50% 0.00% 1 12/1/18 0.00% 0.00% 1 12/1/19 0.00% -11.10% 0.889 Levels of Differentiation Once the data was collected, there were two levels of differentiation applied. The first factor being tested was whether the IPO was filed before or after July 2020. This level of differentiation was fairly simple to use when parsing the data. The second factor was the underwriter itself. When identifying the underwriters, the involvement of a firm as a manager was considered sufficient, rather than relying solely upon the presence of a firm as a lead bookrunner. This is because the Goldman Sachs commitment to diversity applies to all the IPOs it underwrites and advises on, rather than just the ones that it serves as a lead bookrunner on. There were five buckets of underwriting that were used in this analysis. The buckets reflect the overlap with comparably ranked underwriters, as the ranking of underwriters is a critical part of why they are chosen by a company to advise them. The underwriter reputation 12 rankings were identified from an analysis of firm rankings by Jay Ritter ranging from 1980-2020 (Ritter, 2022). Underwriters were ranked from one to ten, with a rank of eight or higher indicating a high prestige underwriter. Of the sixty-five underwriters analyzed in the Ritter analysis, four had a ranking of nine or higher: Goldman Sachs & Co, JP Morgan, Morgan Stanley & Co, and Morgan Stanley International. The two arms of Morgan Stanley had identical rankings and were considered one entity for the purpose of this analysis. Therefore, the five buckets analyzed in this paper included the following: 1. Goldman Sachs alone (without JP Morgan or Morgan Stanley) 2. Goldman Sachs with JP Morgan (without Morgan Stanley) 3. Goldman Sachs with Morgan Stanley (without JP Morgan) 4. Goldman Sachs with both JP Morgan and Morgan Stanley 5. IPOs without Goldman Sachs as a manager Data Analysis After the data was separated into buckets by the first level of differentiation (before or after July 2020) and by the second level of differentiation (which bookrunners were involved), the data was analyzed based on nine metrics. The first set of metrics comprised of finding the absolute averages of each of the relevant data stock points. The averages were found for the percent change in total number of directors, percent change in male directors (based on the gender ratio), first-day return, change in ROE over the time period analyzed, and change in B/M over the time period analyzed. The second set of metrics calculated the correlation between select data points. Correlations were found for the following data points: percent change in number of directors to the percent change in males, 13 percent change in males to first-day return, percent change in males to average ROE, and percent change in males to average B/M. 14 RESULTS Metrics & Analysis for Underwriters As mentioned in the Methodology section, the metrics were found for each of the two levels of differentiation. The results of each of the percentage changes and the selected correlations for different underwriter buckets are shown in Figures 2 and 3. Figure 2: Results for Underwriter Differentiation Avg % change in directors Avg % change in males Avg first-day return Avg % change in ROE Avg % change B/M Correlation directors:%males Correlation males:first day return Correlation males:avg ROE Correlation males:avg B/M GS alone GS w JPM GS w MS 4.5% 4.7% 3.7% -1.6% -1.7% -2.4% 21.9% 20.7% 25.9% 35.9% -3.4% -26.7% 37.6% 42.5% 48.9% 39.7% 39.1% 52.9% -9.9% 3.6% 75.7% Figure 3: Average for Underwriter Results Avg % change in directors Avg % change in males Avg first-day return Avg % change in ROE Avg % change B/M Correlation directors:%males Correlation males:first day return Correlation males:avg ROE Correlation males:avg B/M Average 4.2% -1.6% 19.8% -20.3% 44.5% 39.0% -1.3% -16.0% 71.7% -3.4% -12.1% 69.7% -1.5% -43.2% 74.0% GS w Both 5.1% -1.2% 16.4% -15.8% 44.2% 52.4% No GS 3.2% -1.3% 14.2% -91.5% 49.3% 11.1% -31.6% -14.9% 65.7% 40.0% -13.5% 73.3% 15 The results indicate that the size of corporate boards increased regardless of underwriter involved. The gender ratio also decreased across all categories, indicating an increasing proportion of women as directors on their respective boards. The declining gender ratio (which suggests increasing gender diversity) is even more profound when considering the fact that the sizes of boards of directors were increasing, as this would have had a mitigating effect on the proportion of female representation. However, it is likely that this is attributable to women being added as new directors to boards. Average first-day returns were highest for IPOs in which Goldman Sachs was an underwriter with Morgan Stanley at 25.9% and lowest for IPOs in which Goldman Sachs was not involved as a manager (14.2%). Interestingly, first-day returns were also below average for IPOs in which Goldman Sachs was an underwriter alongside both JP Morgan and Morgan Stanley. The causes for this disparity remain unknown in this analysis. Most notable of the financial metric differences was the average return on equity (ROE). All of the buckets of underwriters saw negative ROE over the period analyzed except for one, in which Goldman Sachs was an underwriter without JP Morgan and Morgan Stanley. The difference was statistically significant, as the ROE for Goldman Sachs alone was 35.9%, compared with an average of -20.3%. Conversely, average B/M was lowest for the bucket with Goldman Sachs alone when compared to the remaining four categories, as well as the average of all categories. Shifting to the correlation metrics, the correlation between the percentage change in directors and the percentage change in males was about average for Goldman Sachs alone (39.7%). The lowest was 11.1% for IPOs in which Goldman Sachs was not involved as an underwriter. The correlation measures the extent to which an increase in the size of the board of 16 directors was correlated to the proportion of males on the board. A higher correlation would mean that there was a greater correlation between the size of the board and the percentage of males. The results suggest that, for a number of the underwriter categories, increasing the size of the board was correlated with an increase in the percentage of males on the board. While this correlation also existed for IPOs in which Goldman Sachs was not involved, the degree of correlation was lower for this category. The correlation between the percentage change in males and the average first-day return varied greatly for each of the underwriter categories. The result for Goldman Sachs alone was a correlation of -9.9%, indicating that increasing the percentage of males was negatively correlated to the average first-day return. There was great variance in this metric across the underwriter categories, with the lowest correlation (-31.6%) for IPOs which included Goldman Sachs, JP Morgan, and Morgan Stanley as managers and the highest correlation (40%) for IPOs in which Goldman Sachs was not involved at all. The negative correlation for IPOs involving Goldman Sachs suggest that increasing gender diversity was correlated with a higher first-day return, while the opposite was true for IPOs that didn’t involve Goldman Sachs. The correlation between the percentage change in males and the ROE also had large variance, ranging from a low of -43.2% for IPOs in which Goldman Sachs was the underwriter alongside Morgan Stanley to a high of 3.6% in which Goldman Sachs was the underwriter without JP Morgan and Morgan Stanley. Of all the correlation metrics calculated, the most significant correlation is between the percentage change in males and the average B/M for two reasons. First, there was not a great deal of variance in this metric when compared to the other correlations. The lowest was 65.7% for IPOs which involved Goldman Sachs, JP Morgan, and Morgan Stanley, and the highest was 17 75.7% for IPOs which involved Goldman Sachs without the other two comparable underwriters. This indicates that decreasing gender diversity was highly correlated to an increasing B/M value. Generally, a higher B/M ratio is an indicator that the market is undervaluing the company, since the ratio divides the book value of the firm (or the equity) by the market value. Thus, the results indicate that decreasing gender diversity is correlated with the undervaluation of a company in the market. Metrics for Date The results for differentiation based on the July 2020 implementation of Goldman Sachs’ commitment to diversity are shown in Figure 4. Figure 4: Results for Date Differentiation Avg % change in directors Avg % change in males Avg first-day return Avg % change in ROE Avg % change B/M Correlation directors:%males Correlation males:first day return Correlation males:avg ROE Correlation males:avg B/M Before July 2020 3.5% -1.5% 15.6% -57.3% 46.2% 21.2% -8.8% -10.7% 73.2% After July 2020 5.8% -0.9% 21.4% -15.8% 63.0% 20.9% -1.0% -20.0% 69.3% Difference 2.3% 0.6% 5.8% 41.5% 16.8% -0.3% 7.8% -9.3% -4.0% Analysis of Date The average percent change in directors overall continued to increase after July 2020, indicative of broader market trends which were analyzed above. The average percentage of males decreased slightly less after July 2020. At first this suggests that Goldman Sachs’ 18 commitment to gender diversity didn’t result in a market-wide increase in gender diversity. However, when taken in the context of the increase in boards of directors, it supports the hypothesis that the increased representation of women on boards was a result of new board seats going to women at a higher rate than before. In other words, an increase in the sizes of boards of directors would have theoretically diluted the proportion of women on such boards, but the fact that the proportion of women continued to increase after July 2020, albeit at a slightly lower rate, is indicative of a successful push for gender diversity. The average first-day return of the IPOs filed after July 2020 was significantly higher than for those filed prior to July 2020. This was likely a result of a wider bull market occurring in late 2020 and into 2021. The average percentage change in ROE, however, was significantly different for IPOs filed after July 2020. Prior to July 2020, ROE was -57.3%, in contrast to ROE of -15.8%. This may also be partially explained by the improving market at the time. The average percentage change in B/M was also significantly higher after July 2020 due to marketwide factors. The correlation of the change in board of directors to the change in percentage of males on boards of directors was almost identical for IPOs filed before July 2020 (21.2%) and those filed after July 2020 (20.9%). The correlation between the change in percentage of males and the first-day return was higher after July 2020 (-1%) than before July 2020 (-8.8%). The correlation between the percentage change in males and the average ROE was significantly lower after July 2020 (-20%) than before July 2020 (-10.7%). The stronger negative correlation indicates that greater gender diversity was more highly correlated with higher ROE after Goldman Sachs’ announcement than before it. The correlation between percentage change in males and change in B/M ratio was, similar to the underwriter categories, consistently high over time. 19 20 CONCLUSION Given that the Goldman Sachs commitment to gender diversity was implemented in July 2020, it is likely too early to determine the broader impact on gender diversity. However, the significant increase in the number of IPOs since July 2020 offers three key insights into the corporate trends on gender diversity. First, the data found that the size of the boards of directors for public companies increased over the time period analyzed. At the same time, the gender ratio for these companies decreased, indicating an increase in the percentage of women on the board. This is initially counterintuitive when considered at face value, as an increase in the percentage of directors would lead to a dilution of the women on the boards of directors. Given the trend in the gender ratio, this paper suggests that the addition of seats is going to women directors to the extent that the potential dilution of board seats held by women by the addition of new seats is actually not materializing. Second, the percent change in ROE for each of the companies analyzed since the time of IPO finds a statistically significant difference between IPOs in which Goldman Sachs was the underwriter without JP Morgan and Morgan Stanley (referred to in the data as Goldman Sachs alone). In this category, ROE increased whereas it decreased in all other categories. When considered on its own, the increase in ROE appears to be solely a financial metric. However, the results found a positive correlation between percent change in ROE and the percentage change in males on the board. This means that, for the companies analyzed, a decrease in gender diversity was correlated to a higher ROE. This was not the case for all remaining categories, many of which included Goldman Sachs as an underwriter alongside a comparably ranked underwriter. The question of the positive correlation in the first category merits further research, particularly 21 into how Goldman Sachs operates as an underwriter when neither JP Morgan and Morgan Stanley are also involved as underwriters. Third, the positive correlation between the percentage change in males and percentage change in B/M was significant across all categories analyzed. This means that a decrease in gender diversity was correlated with an increase in the B/M. As B/M is a ratio that shifts with broader market trends, the fact that the positive correlation existed to a similar extent across all categories is not surprising. It does merit further research into why the correlation is so high, as the extent of correlation in this case was much higher than for other metrics. The burgeoning field of research into gender diversity as it relates to commitments by prominent underwriters will continue to be influenced by both public and private actors. In the case of Goldman Sachs, the data analyzed finds that the increase in gender diversity for the firm itself was limited in its broader market impact. Areas for further research include the impact on the revenues of underwriting firms when such commitments are made, as well as whether such commitments are a necessary part of increasing gender diversity or if they are superfluous to an existing trend. 22 References 2022 Annual Report Statistics. Delaware Division of Corporations. (n.d.). Retrieved March 11, 2022, from https://corpfiles.delaware.gov/Annual-Reports/Division-of-Corporations-2020Annual-Report.pdf Adams, K. (2020, July 1). Goldman Sachs starts diverse board member policy for handling IPOs. Marketplace. Retrieved March 11, 2022, from https://www.marketplace.org/2020/07/01/goldman-sachs-requires-one-diverse-boardmember-for-ipo/ Analysis: IPO diversity plan may cost Goldman $101M in lost fees. Bloomberg Law. (2020, January 28). Retrieved March 11, 2022, from https://news.bloomberglaw.com/bloomberglaw-analysis/analysis-ipo-diversity-plan-may-cost-goldman-101m-in-lost-fees Beltran, L. (2022, January 18). Record year for IPOs boosted the Big Wall Street Banks. Barron's. Retrieved March 11, 2022, from https://www.barrons.com/articles/record-yearfor-ipos-boosted-the-big-wall-street-banks-51642524119 Goldman Sachs' Commitment to Board Diversity. Goldman Sachs. (2020, February 4). Retrieved March 11, 2022, from https://www.goldmansachs.com/our-commitments/diversity-andinclusion/launch-with-gs/pages/commitment-to-diversity.html Hatcher, M., & Latham, W. (2020, May 12). States are leading the charge to corporate boards: Diversify! The Harvard Law School Forum on Corporate Governance. Retrieved March 11, 23 2022, from https://corpgov.law.harvard.edu/2020/05/12/states-are-leading-the-charge-tocorporate-boards-diversify/ McGregor, J. (2020, January 23). Goldman Sachs CEO says it won't take a company public without diversity on its board. The Washington Post. Retrieved March 11, 2022, from https://www.washingtonpost.com/business/2020/01/23/goldman-sachs-ceo-says-it-wonttake-companies-public-without-diverse-board-member/ Missing Pieces Report - Deloitte. Deloitte. (2021, June 8). Retrieved March 11, 2022, from https://www2.deloitte.com/content/dam/Deloitte/us/Documents/center-for-boardeffectiveness/missing-pieces-fortune-500-board-diversity-study-sixth-edition.pdf No women? No gender diversity? No IPO, says Goldman Sachs. DiversityQ. (2020, January 31). Retrieved March 11, 2022, from https://diversityq.com/no-women-no-gender-diversity-noipo-says-goldman-sachs-1508665/ Number of ipos in the U.S. 1999-2021. Statista. (2022, February 25). Retrieved March 11, 2022, from https://www.statista.com/statistics/270290/number-of-ipos-in-the-us-since-1999/ Papadopoulos, K. (2019, May 31). U.S. Board Diversity Trends in 2019 - home | ISS. ISS Analytics. Retrieved March 11, 2022, from https://www.issgovernance.com/file/publications/ISS_US-Board-Diversity-Trends2019.pdf Ritter, J. (2022, March 7). IPO Data. Jay R. Ritter. Retrieved March 11, 2022, from https://site.warrington.ufl.edu/ritter/ipo-data/ 24 Simmerman, A., Macias, J., Stimmell, L., Emeritz, N., & Greecher, R. (2019, August 13). Female Board Power and Delaware Law. The Harvard Law School Forum on Corporate Governance. Retrieved March 11, 2022, from https://corpgov.law.harvard.edu/2019/08/13/female-board-power-and-delaware-law/ 25 Name of Candidate: Sabah Sial Date of Submission: April 20, 2022