Banking Industry's Diversity and Inclusion Stride: Goldman Sachs Finalizes Full-Circle DEI Strategic Shift
In a significant shift, major U.S. banks such as Goldman Sachs and Citi are adjusting their Diversity, Equity, and Inclusion (DEI) strategies due to evolving legal and political pressures.
The changes, attributed to new U.S. federal government policies affecting federal contractors, have prompted the removal of hiring quotas, supplier diversity mandates, and financial incentives linked to diversity outcomes. Explicit diversity language in regulatory filings and board diversity policies has also been minimised, while targeted programs exclusively for specific racial or gender groups have been phased out.
These developments are largely influenced by the Trump administration's executive actions, which laid the groundwork for stricter scrutiny of DEI programs. Policies must now avoid race, gender, or other protected characteristic-based preferences that could disadvantage other groups.
Despite this, shareholders continue to express strong support for maintaining DEI policies. During the 2025 proxy season, over 98% of shareholder votes supported continuing DEI programs, signalling that investors view diversity as a critical business principle and not merely a political or compliance issue.
Banks like Goldman Sachs are navigating this complex landscape by walking back certain formal DEI mechanisms to comply with legal standards while still largely supporting the broader goals of diversity and inclusion. The focus is moving away from explicit quotas towards merit- and value-based inclusion embedded in corporate culture.
Goldman Sachs, for example, has withdrawn a policy that barred the bank from taking public any companies with all-male, all-white boards. The bank's most basic diversity-related statement has changed from emphasising diversity as a social imperative and vital to commercial success to emphasising the diversity of perspectives enhancing performance-based culture and critical to commercial success.
Other banks, such as Bank of America, have renamed their DEI sections to reflect a broader focus. Bank of America's "Diversity and Inclusion" section is now called "Talent, Inclusion and Opportunity."
Citi, the first Wall Street bank to hire a woman CEO, has dropped "aspirational representation goals" and a diverse-slate hiring requirement. The bank aimed for women to represent 40% of its vice presidents by this year, and for Black and Latino people to comprise 7% and 9%, respectively, of U.S. vice presidents by 2025.
Despite these changes, JPMorgan Chase's CEO, Jamie Dimon, has clarified that the bank will continue to reach out to underrepresented communities. Citi's CEO, Jane Fraser, has attributed the changes to the new U.S. federal government policies affecting federal contractors.
This evolving scenario suggests an ongoing recalibration of how diversity is achieved in the U.S. corporate sector, moving away from explicit quotas and towards merit- and value-based inclusion embedded in corporate culture rather than as regulatory or quota-based compliance.
In this evolving scenario, U.S. banks, such as Goldman Sachs and Citi, are modifying their Diversity, Equity, and Inclusion (DEI) strategies due to shifting policy-and-legislation, a development largely influenced by the Trump administration's actions. Despite withdrawing certain formal DEI mechanisms and dropping specific quotas, banks still view diversity as a crucial business principle (business), and they are focusing on merit- and value-based inclusion (finance) embedded within their corporate culture.
