How trustees can improve pension industry diversity in just 20 minutes

As The Pensions Regulator’s home city gears up for UK’s biggest LGBTQ festival, its Interim Director of Regulatory Policy, Analysis and Advice, Louise Davey explains how trustees can take immediate action to help ensure workplace pensions work for all savers.

August is an exciting time for a Brighton-based organisation such as The Pensions Regulator (TPR).
Every year the city takes on a special kind of buzz as it prepares for Brighton & Hove Pride and the 500,000 visitors it attracts.

This year, like others, TPR is excited to be taking part in the event’s parade. As one of Brighton’s significant employers, we want potential talent to understand that TPR is a diverse and inclusive organisation.

We know we have more to do to increase representation within our organisation while building a fair and inclusive culture for our workforce.

We are committed to attracting diverse talent and creating an organisation that people can be proud to be a part of.

We hope our mission to improve our own diversity and inclusion practices will help show trustees how serious we are when we call on them to do the same for their scheme’s board.

There is much work to do to ensure workplace pensions work for all savers and we are committed to leading from the front.

But to ensure the right solutions are applied in the right way, industry and regulators must work together to establish a robust evidence base to draw from.

Deeper understanding

This process has already begun. For example, we were pleased to hear about the establishment of the Pensions Equity Group in May, to develop a collective understanding of pension gaps for particular groups of savers.

And in July, we launched a trustee diversity and inclusion survey.

We want all occupational scheme trustees to take part in this important exercise which will build a clearer picture of trustee diversity. If you have received a letter or email from us asking you to take part, please do so before Friday (4 August 2023).

The survey is anonymous and will help build a picture of trustees’ diversity so we can effectively measure our progress in promoting high standards of diversity and inclusion.

We know there are many in the industry as passionate as us about improving inclusion in the pensions industry. There’s nothing controversial in wanting to avoid groupthink, decision bias and a lack of challenge. We know diverse groups make better decisions and identifying where we are now should improve our ability to see where we progress can be made.

But there’s still much we don’t know. We don’t know how many trustees consider themselves to have a disability. We aren’t clear on what proportion of trustees would describe themselves as being lesbian, gay, bisexual or transgender. And we do not believe diversity is just about visible or protected characteristics, it’s also about skills, experience and cognitive diversity. We need trustees’ input if we are going to better understand these areas.

The survey shouldn’t take more than 20 minutes to complete. And by doing so trustees will help us understand how diverse pension boards are, opinions on diversity and inclusion and what’s already being done.

Representative industry

Our long-term aim is for the trustee landscape to be more representative of today’s society and the purpose of our survey is to enable us to measure this over time. We are not looking at individual boards but the whole of the trustee community in its entirety.

But by taking part in this survey individual trustees will be helping us develop our approach and next steps to improve equality, diversity and inclusion on pension scheme governing bodies.

We understand there can be challenges in achieving diversity but our recent guidance contains practical ways to overcome them. It attempts to address a historic imbalance in diversity in pensions and covers how to remove barriers preventing people from under-represented groups considering becoming a trustee. And we want boards to implement practices that are inclusive, so diverse talent is retained.

Trusteeship is an important role carrying a lot of responsibility. We want people in the role who have integrity, good communication skills, the ability to work and contribute as part of a decision-making group, good, independent judgement and a commitment to securing good outcomes for savers.

We expect to develop our guidance as our evidence base develops. As an employer and a public body, we have a public sector equality duty to address inequality of opportunity where we identify it. This survey is one of the tools we hope to use to develop that evidence base.

We also need to challenge beliefs that trustees need to have a certain number of years’ experience or come from certain career backgrounds.

Boards must have certain skills, knowledge and expertise but this work is about considering a scheme’s needs and what mix of people with different skills, life experiences and characteristics will give the diversity of thought needed to make decision in savers’ best interests.

We know increasing diversity of trustee boards isn’t going to happen overnight. By having their say through our survey trustees can, in 20 minutes, help ensure the pensions industry has the right evidence now to make the best decisions to achieve greater diversity on boards over time.

By Louise Davey, Interim Director of Regulatory Policy, Analysis and Advice