Goldman Sachs recently announced it will remove diversity criteria from its board selection process. The implied reasoning is a move back to “merit-based” selection.

Having served on corporate boards for over twenty-five years, I find this framing concerning. The idea that removing diversity criteria returns to “pure merit” overlooks how board selection has always actually operated.

In my experience, merit has rarely been truly impartial. It is usually defined by those already holding power, who tend to see it in individuals who look and think like them. Without intentional processes, board selection often defaults to “who do we know” instead of “who is most qualified.”

In my experience, this is how closed networks sustain themselves… it is referred to as network replication, not meritocracy.

Research confirms what many of us have seen firsthand. Deliberate diversity strategies do not lower standards; they expand the talent pool beyond insular networks to include qualified candidates who might otherwise be overlooked. Homogeneous boards are more prone to groupthink and blind spots. Especially in financial services, diverse perspectives are essential for identifying risk. Studies consistently show that boards with critical mass diversity perform better than those without. MSCI found that boards with at least 30% representation achieved cumulative returns 18.9% higher between 2019 and 2024.

For boards serious about fiduciary duty, I believe the necessary actions are clear. Maintain intentional diversity strategies. Broaden your networks. Use board skills matrices that incorporate diverse perspectives and experiences. And hold nominating committees accountable for looking beyond existing connections.

At its core, this is about governance excellence.

I’ve long believed in the power of three: one woman in the boardroom is a token, two is a presence, and three is a voice. The same principle applies to diversity of thought and experience. When boards reflect a range of perspectives, they make better decisions and identify risks that homogenous groups overlook.

As boards evaluate their nomination processes, I encourage them to consider whether these procedures aim to find the best talent or just to confirm existing networks.