Goldman Sachs is preparing to make a notable change in its board selection criteria by removing references to race, gender identity, ethnicity, and sexual orientation, as reported by the Wall Street Journal. This shift is perceived as a break from the identity politics that have influenced corporate governance in the financial sector in recent years. The banking giant's governance committee has traditionally emphasized a broad notion of diversity, including varied viewpoints and professional backgrounds, but it is now reconsidering these points in light of changing attitudes.

This decision indicates that Goldman Sachs is responding to broader trends in corporate America where there is a growing backlash against what is commonly referred to as 'woke' policies. The financial services sector, which had once embraced diversity and inclusion initiatives, is now witnessing a reevaluation as firms like Goldman Sachs signal their intentions to prioritize different criteria. This move underscores a shifting landscape in corporate governance as firms navigate the balance between diversity and perceived political correctness.

As Goldman Sachs steps away from identity-based criteria, the implications for the wider financial industry could be profound. Other firms may follow suit, reassessing their own diversity policies and the criteria they use for board nominations. This could lead to a significant realignment in how corporate America views and implements diversity, potentially sparking debates on the role of race, gender, and other identity factors in leadership positions.