PLSA kick-starts year-long diversity debate to improve pensions

Tapping into the widest possible talent pool is something every pension fund might strive for in theory, but practice lags woefully behind, with governance boards 83 per cent male, according to the PLSA. 

The financial value diverse leadership can add to companies is often cited in debates around mixing up all white, all male bastions. 

In its latest attempt to make pension boards less grey and male, the PLSA announced a year-long focus on diversity at the launch event of its monograph, ‘Breaking the mirror image: Harnessing talent through diversity for better pensions’, containing accounts by senior industry figures, including chief executive of the Pensions Regulator, Lesley Titcomb. 

The ‘Breaking the mirror image’ campaign also has the support of pensions minister Richard Harrington. 

'Starting with women'

Lesley Williams, PLSA chair, said the project was “starting with women”, although the reason other dimensions of diversity were not included was limited to the statement that gender diversity issues would be “a good place to start”. 

However, Williams added the PLSA “will be talking wider than that” in its quest for better pensions eventually. 

“Diversity breaks up groupthink, improves decision-making and improves results,” she said.        

The association is therefore planning a series of events with trustee chairs, and will publish research and guides on the topic. “It’s about making it happen,” Williams said.

The PLSA emphasised the financial rewards more diverse leadership can bring, but others disagreed that money should be the main driver behind efforts for greater inclusion; Ian Baines, head of pensions at building society Nationwide, said diversity is a value in itself. 

“To just lead on why it adds [financial] value is missing the point,” he said. 

He was countered by Chris Hitchen, chief executive of the Railways Pension Trustee Company, who said pension professionals should focus on what they can achieve in their field: “It’s not my job to save the world; my job is to pay pensions.” 

Comms is part of the diversity picture 

Improving board diversity could also help female scheme members understand their pensions better if it means communications are changed. 

Sarah Pennells, founder of website SavvyWoman.co.uk, said in her experience women were not nearly as unengaged with pensions as they were often perceived to be, but that jargon created a barrier for many. 

“Language is so important… it seems to be something that matters more to women,” she said, arguing that women are particularly conscious of risk and therefore reluctant to take financial decisions based on information that might not be clear to them because of jargon. 

Put pressure on fund managers

Bijal Shah, UK benefits manager at Mars, spoke about her first experiences as a female actuary 20 years ago, having to present to all-male trustee and company boards, and said although things have improved, the industry still has a way to go. 

“The pensions industry has moved on, times have changed, but there is still a lot more that can be done,” she said. 

Helena Morrissey, who chairs the Diversity Project campaign and the Investment Association, agreed that more needs to be done on gender diversity, saying that even current efforts are “still just scratching the surface”. 

Pointing to pension funds’ power as asset owners, she proposed they demand accountability from investment managers. 

“If everybody… were to ask of their fund managers what their diversity figures are” this would move the industry forward, Morrissey said. “We have to be bolder in our ambitions.”