The end of pale, male and stale trustee boards? TPR publishes D&I strategy
Pardon the Interruption
This article is just an example of the content available to mallowstreet members.
On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.
All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.
The Pensions Regulator plans to “lead by example to create a fairer and more inclusive culture across the pensions industry and work with others to address inequality among savers”, it said as it publishes its Equality, Diversity and Inclusion Strategy.
The strategy was developed in discussion with the industry, setting out a roadmap of how the regulator plans to integrate diversity and inclusion in its organisation as well as how it will support pension funds to do the same.
It said it aims to:
- be a fair, diverse and inclusive employer;
- build a collective understanding of why pensions inequalities occur and work in partnership with others seeking to reduce them; and
- promote higher standards of equality, diversity and inclusion among its regulated community.
By the end of 2021, TPR said it will work with pension funds, including through the new Board Diversity Industry Working Group, to have in place a plan for scheme governing bodies to become more diverse. The work will build on the Future of Trusteeship programme. The plan will include ways to share resources and best practice in the long term, for example by creating an online hub.
“Now more than ever, organisations and employers are being called on to take a lead in bringing about a fairer and more inclusive society,” said TPR chair Sarah Smart. “The status quo is not acceptable and it is crucial we continue to challenge ourselves so that diversity and inclusion are not simply seen as desirable but that they are embedded across everything we do.”
She added: “We also look to the pensions industry to work with us and work together to bring real improvements in diversity in relation to decision making across the sector. We know that this will improve the quality of decisions and it will mean that trustee boards better reflect the diversity among savers.”
TPR’s Chief Executive Charles Counsell said TPR has been on this journey for some time but knows there is more to do.
“We have been clear in our Corporate Strategy that we want all savers to get good value for their money, that decisions made on behalf of savers are scrutinised, and we are a bold and effective regulator. Improving diversity and inclusion is fundamental to these goals. When we say we will put the saver at the heart of what we do, that means all savers. No-one should be left behind,” he added.
Consulting firm McKinsey published a report in 2018 showing that companies with more diverse executive boards had a 21% to 33% higher likelihood of financially performing above the national industry median.
The pensions industry has a severe lack of diversity, putting into question if members receive the best value. Data from 2016 shows that 83% of scheme trustees were male, and that just 2.5% of scheme trustees were under 30 while a third were over 60 years old. Only 5% of trustee boards had more than 50% female trustees, and a quarter still had all-male trustee boards.
Inequality is also a problem in the saver population, where disabled people, ethnic minorities and single mothers have been shown to have a much lower pension income than the general population.
The regulator is inviting the industry, government and other regulators to sign up for its Equality, Diversity and Inclusion webinar (tprevernts.org.uk) next month to learn more about the strategy and discuss next steps.
