Good morning, Broadsheet readers! Kevin Tsujihara is out at Warner Bros., #MeToo clauses are growing more common in VC deals, and Goldman Sachs implements its own Rooney Rule. Have a terrific Tuesday.
• Goldman Sachs’s Rooney Rule. When Goldman Sachs CEO David Solomon spoke at Fortune’s Most Powerful Women Summit in October—just days into the top job—he said he’d already asked some “really tough questions” about why the firm wasn’t at 50-50 gender diversity in recruiting new hires out of college.
Existing recruiting efforts, relying on “historical biases,” were producing too few female hires, he said. So Goldman tweaked its tactics, targeting its investment banking business first, and saw a three-percentage point improvement. Sometimes, Solomon said, you have to get “simple and practical about what will move the needle.”
Goldman is seeking to move the needle again, stating yesterday that it will require hiring managers to interview at least two diverse candidates for any open role. It’s the bank’s version of the so-called Rooney Rule that saw the National Football League require teams to interview a minority candidate for every head coaching job.
Goldman’s Rooney Rule comes on top of its earlier commitment to having a 50-50 gender split in its incoming analyst classes; the bank said on Monday that it’s “nearly there” on that goal. The additional step is wise, since the bank’s gender imbalance is especially stark higher up the ladder. Of its 400 partners, fewer than 20% are female; of the 30 executives on its management committee, seven are women, four of whom joined last year, according to the Wall Street Journal. The bank, to its credit, owned up to the problem, stating that “lateral hiring,” while vital to the firm’s growth, “has been a significant contributor to the dilution of diversity at more senior levels,” hence the need for its Rooney Rule.
Other giants like Amazon and Facebook have relied on a version of the rule in recent years to address their own gender and racial inequities at the board level and firm-wide, respectively. But even as the Rooney Rule has proliferated in the corporate world, the effectiveness of the approach has come under question. For one, the Rooney Rule hasn’t fully solved the diversity problem it first targeted: the NFL’s. And by instituting interview quotas—rather than hiring ones—it lets adherers easily check a box and move on.
Interestingly, in its announcement on Monday, Goldman Sachs expanded its gender-balanced hiring goal to “all analysts and entry-level associates hired either on campus or laterally,” a group, the firm says, that represents more than 70% of its annual hiring. What about the other 30%? Even with its new Rooney Rule, it seems like Goldman isn’t ready to ask itself that ‘tough question’ just yet.
ALSO IN THE HEADLINES
• Circular clauses. Tech investors are increasingly adding “#MeToo clauses” to their deals. The clauses force startup founders to disclose complaints about sexual harassment at their companies. Meanwhile, pension funds and family offices are, in turn, asking the venture firms they back to sign similar agreements. Financial Times
• #LeadersforLeave. In a Fortune op-ed, Houseparty co-founder Sima Sistani writes about her effort to start a campaign in Silicon Valley for startups to offer paid family leave. But while many of the companies she approached expressed interest, in the end, only six would sign on—a sign of how complicated the issue is for earlier-stage firms. Fortune
• Going SPF crazy. One market that’s growing fast? Sun care. It’s far outpacing the other 97% of the skincare market, and Holly Thaggard’s Supergoop is one company capitalizing on the trend—most recently, with a first for the industry: an eyeshadow infused with SPF. Fortune
• Vacancy at WB. Kevin Tsujihara was ousted as Warner Bros. chairman and CEO in the midst of a sexual misconduct investigation; Tsujihara was accused of promising roles to actress Charlotte Kirk in exchange for sex and of influencing casting in her favor. Fortune
MOVERS AND SHAKERS: Donna Brazile joins Fox News as a contributor. Amanda Collins was named EVP and global head of corporate communications for Sony Music Entertainment. Bernadette Aulestia will reportedly resign from her longtime role as HBO’s president of global distribution. Slack chief product officer Tamar Yehoshua and Deloitte vice chair and west region managing partner Teresa Briggs joined the board of ServiceNow.
IN CASE YOU MISSED IT
• Stacey’s star power. Rebecca Traister spends time with Stacey Abrams as the one-time gubernatorial candidate ponders her next move, writing the definitive profile of the rising political star. “The deepest irony,” Traister writes, “is that what Abrams wants to do is fundamentally rebuild the electoral system that failed her, just as the system itself wants to pull her in.” The Cut
• Reporting from Rikers. CNN’s Poppy Harlow went to Rikers Island to meet mothers in the controversial New York jail. The mothers participated in a new program through the Children’s Museum of New York that allows some of the women to spend time outside the jail with their children. CNN
• Survey says… A survey of 9,000 members of the American Economic Association revealed something we might have been able to guess: sexual harassment is rampant in economics. Half of the women surveyed said they’d avoided speaking at a conference to guard against harassment or “disrespectful treatment;” seven in 10 said they thought their colleagues’ work was taken more seriously than theirs; and just under 100 women in economics said a peer had sexually assaulted them. New York Times
• A troubling spreadsheet. The Trump administration has monitored the pregnancies of minor girls who came into the country through the Office of Refugee Resettlement—not by the numbers, but the individual girls. An anti-abortion activist leads that office; the Rachel Maddow Show obtained the spreadsheet tracking the pregnancies. MSNBC
ON MY RADAR
How urban dirt biking is getting black girls into STEM Mashable
Cat Marnell pays taxes now The Cut
3 female congressional chiefs of staff on how they get it done in D.C. Shondaland