These truisms present significant challenges for trustees of pension schemes, especially where the board consists of a single independent professional trustee.
In The Pension Regulator’s own words: “Unconscious bias can also lead to an environment which stifles fresh thinking or approaches and a failure to properly recognise issues that have a real-life impact on savers outcomes.” 1
Having spent several years as the sole representative at a very small professional trustee firm, I hadn’t fully appreciated the significant drawbacks this created in terms of diversity of thought and inclusion of views until I joined 20-20 Trustees in January 2019 following a corporate acquisition. I now have access to the ideas and views of a diverse team of industry professionals within a working environment where people feel comfortable sharing. This has been very beneficial in broadening my understanding of how people with different expertise view certain situations. It’s helped me deepen my own trustee knowledge across a range of disciplines and has made me a better trustee for my clients.
One manifestation of this teamwork is our robust sole trustee governance structure and process that provides peer review, healthy debate and challenge. For me though, it’s not simply these structures that allow for diversity and inclusion.
If a trustee sees diversity and inclusion as a destination rather than an ongoing journey, we have already failed.
It’s the teamwork, sharing and continuous improvement that lead to better outcomes.
Expanding on this idea, a sole corporate trustee (or even a larger trustee board for that matter), can never create an environment in which they fully represent the views of the entire membership, but they can put in place a structure that allows them to listen and learn. Again, though, it’s not the act of just listening to gather diverse perspectives that counts; it’s the synthesis of those thoughts and reflecting back what you hear that are critical. Therefore, a key aspect of diversity and inclusion actually comes in the form of member communications.
I find discussions around member communications interesting in terms of what trustees and their advisers tend to focus on. All too often the focus is on imparting information to members through things like annual statements, funding updates, newsletters, etc. Whilst these communications are important and often legally required, they miss an important opportunity to really engage a diverse membership.
It would also be beneficial for trustees to exchange information with scheme members to not only gauge their understanding of the scheme and the benefits it offers but also obtain their thoughts as to how the views of members could be better represented, and reflect back what they’re hearing.
Echoing Rocky’s sentiments as I close, diversity and inclusion needs to start reaching beyond the ‘who’ and start focusing on the ‘how’. Working as a team and listening to those who have different perspectives and experiences will ultimately lead us in the direction we want to travel, both as an industry and as a society.
If this article has prompted an interest in knowing more about diversity and inclusion from a pension scheme trustee perspective, I would direct the reader to the Pensions and Lifetime Savings Association’s Diversity & Inclusion Made Simple Guide here www.plsa.co.uk/ Policy-and-Research/Document-library/Diversity- Inclusion-Made-Simple
- The Pensions Regulator, Industry Consultation: Future of Trusteeship and Governance, July 2019
This article was featured in Pensions Aspects magazine February 2021 edition.
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