In National Inclusion Week (23-29 September 2024), Vidett, a UK-leading professional trustee and pension governance firm, is shining a light on the challenges pension boards face in improving diversity and inclusion. Vidett offers trustees actionable tips to help drive change and enhance diversity within their boards.
Inclusive and diverse boards are essential for effective decision-making, governance and good member outcomes, yet research from Cardano suggests that pension trustee boards remain overwhelmingly male and white and over age 45[i]. While this doesn’t make diversity—or diversity of thought—impossible, it does make achieving it more challenging.
Other research from Barnett Waddingham[ii] highlights that whilst most pension scheme trustees believe they are well-trained on The Pension Regulator’s Equality, Diversity and Inclusion (EDI) guidance, many struggle with implementing processes due to time constraints. 71 per cent of trustees said they find themselves constrained by time stating that they are too busy to research and learn about best practices, leading to 77 per cent of them seeking support from external advisers.
Simon Lewis, Client Director at Vidett, commented: “The Pensions Regulator and those representing the pensions industry have published excellent guidance to help trustees and employers review if they are doing enough on EDI for their pension arrangements. Yet this survey shows many trustees lack the time to dedicate to improving diversity and inclusion.
“Trustee boards and their sponsors have a duty to consider EDI on an ongoing basis, focusing on learning, evaluation, and action. To make real progress, it’s crucial to integrate EDI into trustees’ day-to-day operations, rather than treating it as an afterthought or a separate governance burden.”
Below are Simon’s top tips to boost board equity, diversity, and inclusion:
- Conduct an EDI review: Establish what is currently being done and identify areas for improvement. This review must have a clear remit and support for making changes. Participants should be open and honest, acknowledging that the process may be uncomfortable at times. Additionally, it’s essential to include EDI on the risk register to ensure it remains a focus for the board.
- Provide training and facilitate EDI conversations: Training teams in equity, diversity, and inclusion can help facilitate constructive conversations to drive change.
- Address unconscious bias: Ensuring unconscious bias doesn’t influence recruitment and communications is key to improving board diversity. It is vital to address diversity in terms of age and ethnicity, not just gender, in recruitment processes.
- Set clear EDI principles and expected behaviours: Boards should establish and agree on their EDI principles, making them clear in policies or statements of intent. These principles should be visible in job descriptions and the selection process for new board members.
- Promote representation: Ensure that processes support wider representation, fostering diverse thinking.
- Communicate effectively: Review the imagery and language used on websites and other literature that potential candidates might see. Communications should be inclusive and considerate of the audience.
- Expand recruitment channels: Broaden the search for board members beyond traditional networks by using diverse job boards, partnering with minority-focused professional associations, and engaging executive search firms that specialise in diverse placements.
- Include EDI as a standing agenda item: To ensure continuous focus, make EDI a regular discussion point at meetings, helping embed it in day-to-day governance.
Simon adds: “National Inclusion Week provides an ideal opportunity for trustees to conduct a review, set goals, and take action. By developing comprehensive diversity policies, setting measurable goals, promoting inclusive recruitment practices, and fostering an inclusive culture, organisations can build more diverse and effective boards.”
Vidett helps pension trustees understand EDI and put proportionate, sensible actions into practice. They have also produced a guide to EDI for pension trustees and managers, which can be downloaded here.
