U.S. bank Goldman Sachs says it will stop helping firms with their public flotations if they don't have diverse management boards.

The bank underwrites Initial Public Offerings (IPOs) but CEO David Solomon told a panel at the World Economic Forum in Davos, Switzerland that from July 2020, it will only assist firms with at least one "diverse" board member. 

"Starting on 1 July in the U.S. and Europe, we're not going to take any company public unless there's at least one diverse board candidate, with a focus on women," Solomon told CNBC. 

The number of companies with more diverse boards should increase in line with the law passed in California in 2018 – that companies registered in the state must have at least two female directors (or three, if there are more than six on the board). Although Goldman will not specify that women should sit on the boards, and will not go higher than requiring two "diverse" board members at this point, its focus on diversity is thought to be good for both the image and the bottom line of the global bank and fund manager. 

"The performance of IPOs where there's been a woman on the board in the U.S. is significantly better than the performance of IPOs where there hasn't been a woman on the board," Solomon continued. 

"In the long run, this, I think, is the best advice for companies that want to drive premium returns for their shareholders."

Goldman, which has four female members sitting on a board of 11, was involved in the disastrous IPO launched by WeWork in 2019. The shared working space venture run by the now notorious Adam Neumann pulled its IPO for several reasons, but a lack of diversity on its board was reportedly one of those that put off potential investors. 

Italy, France and Germany have all introduced laws to mandate the representation of women on boards. According to French labor minister Muriel Pénicaud, women now constitute 43 percent of France-based boards – up from 10 percent when the law was passed in 2011.