The results of The Pension Regulator’s (TPR) first trustee diversity and inclusion (D&I) survey, which has been completed by 2,197 UK pension fund trustees – making it TPR’s largest-ever survey – are expected to provide a baseline to measure progress towards ensuring high standards of diversity and inclusion on pension boards.
The survey, which ran between July and August last year, showed that currently the ‘typical’ trustee is a white man, over 45 years old, without a disability, heterosexual, and either of Christian faith or no religion. More than half (53%) of trustees had all of these characteristics.
However, results highlighted industry recognition of the importance of inclusive and diverse boards, with 78% saying they felt a diverse trustee board was important. There was also a broad consensus that diverse and inclusive boards are important for good decision making (84%), good governance (83%) and good member outcomes (85%).
And while the survey highlights the lack of trustee diversity in terms of protected or visible characteristics such as ethnicity, most trustee boards were seen as diverse in terms of skills (82%), life experience (74%), professional background (73%), cognitive diversity (73%) and education (61%).
Louise Davey, TPR’s interim director of regulatory policy, analysis and advice, said: “Growing evidence shows diverse and inclusive boards make more effective decisions, which is key to good governance and improving saver outcomes.”
She said that while the profile of the ‘typical’ trustee is unlikely to be a surprise, this survey has supplied important baseline data that TPR can use to measure progress towards more diverse and inclusive scheme boards.
She added: “It also shows the majority of trustees recognise the importance of greater board inclusivity and diversity, although fewer than half of schemes have taken action to improve.”
Davey said that TPR wants trustees to think about diversity more widely than just through more visible characteristics and consider their boards’ skills, life experience and cognitive diversity as well.
“Those wanting to improve their scheme’s board should take advantage of our latest guidance, which provides practical ways to improve board diversity and inclusion,” she said.
Gillie Tomlinson, head of trustee engagement at Cardano, said: “We are pleased to see talk of enhancing [D&I] on trustee boards continuing to gain momentum.”
Tomlinson pointed out that Cardano’s own research backs up the idea that D&I sits much higher on schemes’ agendas than it used to, with a surge of firms having set strategies and targets over the last year.
However, she said that what Cardano’s and TPR’s research clearly shows is that boards are now struggling to turn those words into actions.
“Practical progress needs tangible commitments, including trustee succession plans which prioritise [D&I], and an industry-wide focus on collecting comprehensive data to monitor the effectiveness of [D&I] policies.”
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