Fresh perspectives: Turning intention into action on pension trustee diversity

The more diverse the people, the experiences and the perspectives, the better the decisions. Yet as PwC research highlights, many pension trustee boards are still unrepresentative of the membership they serve. However, there are signs of positive change.

PwC’s 2021 Women in Pensions Conference explored practical ways to foster greater equality, diversity and inclusion within trustee boards.

We were joined by Sarah Smart, making her first public appearance since being appointed Chair of The Pensions Regulator, Maggie Semple, a consultant in D&I and member of the Queen’s Counsel Appointments Panel, and John Preston, chair of the Sainsbury’s defined benefit pension scheme. We discussed three practical actions that could drive change:

1. Win over the silent majority

As a rule of thumb, around 15% of people generally ‘get it’ – they recognise the value of equality, diversity and inclusion in making boards more effective, and are actively seeking to promote them. At the other end of the spectrum are 25% of people who are reluctant to engage.

In between are the people who ‘get it’, but lack the confidence to speak out and play a role in driving change. The 15% can’t make a difference on their own. But if the middle 60% could be encouraged to move from passive to active support, we’re likely to see significant progress.

2. Step up the search

It’s common to hear “there aren’t enough applicants from underrepresented groups” or “building a suitable pool of candidates could take years”. In reality, diversifying trustee boards requires a change in approach and an investment of time. In turn, potential candidates may think they don’t meet the criteria for selection.

The first step is therefore convincing more people that being a trustee is a role they could perform well and in which they can make a difference. As a board of trustees, this includes communicating within your recruitment advertising that you welcome applications from underrepresented groups with a wide range of skills and backgrounds. You may also want to consider advertising the role across a broad range of forums. Finally, it’s important to make it clear you’re willing to give candidates the training and support they need.

Within the selection process, we’ve seen how steps such as blind CVs and longer shortlists can help overcome biases, while enabling quality candidates to come to the fore. A more thorough process may take more time but the cost is outweighed by the benefits. This kind of positive action is an effective way to encourage more people from underrepresented groups to apply.

3. Encourage real debate

Diversity doesn’t necessarily guarantee inclusion. Even when membership is broadened, more vocal and experienced trustees may dominate discussions. There is also a tendency to promote consensus, which while understandable can close out different perspectives. It’s therefore an important role of the whole board, facilitated by the chair, to encourage full and open debate. Even if this is difficult to achieve within scheduled meeting times, the discussions can continue offline.

From the discussions we had and subsequent feedback, it is clear these positive changes are something a large proportion of the industry feels passionately about.

If you have any comments or would like to discuss any of the issues raised in this blog, please get in touch.

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