Why trustee boards need better D&I

The Pensions Regulator’s (TPR) director of regulatory policy, analysis and advice has shared why diversity and inclusion is crucial when it comes to trustee boards improving their decision making.

In a blog post, David Fairs noted that “diverse groups make better decisions” adding that it is essential to ensure all savers get the retirement they are planning for.

Fairs pointed out that a diverse and inclusive trustee board can make a difference when it comes to encouraging people to speak up. Plus, he explained boards which aren’t diverse “risk knowledge gaps, entrenched ideas, biased thinking and poor decision making which puts savers at a disadvantage”.

He warned that there may be challenges with diverse boards too. For example, there may be more debate, the duration of meetings may take longer and disagreements may be more frequent.

But he stated: “That will ultimately lead to better decisions, even though it won’t feel as straightforward as when everyone just nods decisions through.”

Pull in the same direction

For this to work, Fairs wrote that everyone must work together and pull in the same direction for a diverse board to work.

To assist with this, TPR set up an Industry Working Group to tackle the barriers to diversity and inclusion (D&I) across the industry.

“When we first called on industry to join the group we were delighted more than 60 representatives from across the sector wanted to be involved,” Fairs wrote.

“It’s testament to a tide turning in favour of real change that so many people wanted to give their time and energy to improving decision-making on behalf of savers by making pensions a more level playing field for all.”

The working group now has four work streams including:

• The role data can play in bringing D&I to governing bodies.
• Developing best practice in the composition of boards.
• Developing practical tools to share best practice on recruiting trustees.
• Delivering engagement with employers to help broaden the appeal of trusteeship.

Taking the lead

To show its pledge to tackling D&I, Fairs revealed that the TPR has recently signed up to D&I pledges agreed with the UK Regulators Network, where all regulators are taking action.

He continued: “The pledges don’t only mean that we will be taking action within our regulated community but also as an employer.

“Our ED&I strategy sets out the steps we are taking as an employer. In some areas, such as gender representation, we are already in a strong place – in other areas around ethnicity, sexual orientation and disability we have work to do, and that work is ongoing.”

He concluded sharing that TPR aims to be “very transparent” around its own journey.

Read the latest issue of Reward Strategy magazine here to find out Fairs’ views on why savers need board diversity.