Ethnic and disability diversity progress lags behind age, gender and social background, survey finds.
Almost two-thirds of UK pensions professionals (65%) believe trustee boards need to be more diverse, according to a Pension and Lifetime Savings Association (PLSA) survey. Further, 31% of respondents said the diversity of their own board of trustees is poor, whereas 35% said it is only average. Just 28% of respondents described their pension trustee board’s level of diversity as good.
Although survey findings identified that age, gender and social backgrounds are “seen to be better represented”, ethnicity and disability remain “not at all well represented”. Despite this, amongst the better represented groups, such as gender, 28% felt they are not very well represented and 10% not at all represented. The PLSA survey received feedback from 57 UK pension schemes.
Speaking yesterday at the 2020 PLSA Trustee Conference, Helen Price, Stewardship Manager at Brunel Pension Partnership, said implementing a diverse trustee board should be one of the industry’s “main priorities”.
“Studies have found that having more diverse boards is central to the health of a company. So that is something [Brunel Pension Partnership] very much wishes to engage on,” Price said.
“It is vital that pension schemes have the right people in place throughout the organisation. To do that you need a wide range of skills, backgrounds and outlooks to ensure all members’ interests are at the heart of decision-making processes,” added Julian Mund, CEO of PLSA.
“Walk the talk”
The survey results suggest strong support for the benefits of diversity and inclusion among pension professionals. The majority (91%) claimed that prioritising diversity and inclusion “will improve decision-making and attract and retain talent”. A further 89% said this would better reflect members’ interest in diversity and inclusion.
Price noted that, while there is a lot of demand for improvements in diversity and inclusion, pension schemes are not proving that they can “walk the talk”.
A high proportion (48%) of respondents have “no specific strategic objectives around diversity and / or inclusion”. For respondents who do have a diversity and inclusion strategy (12%), a quarter of that number are focused on diversity in recruitment and training.
To ensure fund managers are reflecting pension fund members’ support for diversity and inclusion, Brunel Pension Partnership asks its managers to provide diversity metrics and details on projects and initiatives at investee companies designed to improve diversity.
“This allows us to not only assess [the fund manager’s] approach, but to develop more of an understanding as to how they are engaging with companies on our behalf,” she explained.
Integrating diversity and inclusion values
Earlier this year, PLSA released a ‘Diversity and Inclusion: Made Simple Guide’ report, which outlined key ways in which trustee boards, stakeholders and fund managers can best integrate diversity and inclusion values.
“There is no perfect solution to achieve greater diversity and inclusion; the key is to make small but significant steps on a regular basis,” the report noted.
Suggestions included the implementation of a formal diversity and inclusion policy, blind CVs and application forms, promotion of an “active bystander culture”, regular training on diversity issues and gathering diversity and inclusion-related data throughout the recruitment process.
Although PLSA noted that “it may not be appropriate to implement all suggested measures”, trustee boards should be prepared to “provide a compelling justification where they do not substantially comply”.
“It may also be wise for trustees to note the sponsoring employer’s diversity and inclusion policies and practices, as these may correlate with improved decision-making and, ultimately, business performance and profitability,” the report added.
“There is a lot more work to be done,” said Craig Rimmer, Policy Lead: Master Trusts at PLSA, also speaking at the conference. “Our research shows we are still not seeing the ideal picture of diversity.”
The PLSA represents master trust and local authority pension schemes in the UK, with members including asset managers, consultants and investment professionals.