J&J finds remedy for MNT recruiting ailment

Complaints about the difficulty of finding MNTs, let alone well suited ones, abound, yet comparatively little effort has been put into improving this situation.

Finding the right people is key, and employers have a responsibility to engage

Peter Askins, ITS

And with many defined benefit schemes closed to accrual, it is becoming increasingly onerous to find good trustees. A recent survey by consultancy PwC found that trustee board sizes are becoming smaller, likely as an effect of shrinking member pools. Between 2014 and 2016, the number of boards with 9-11 members reduced by 22 per cent, while those with 6-8 members increased.

Johnson & Johnson’s trustee board faced a situation where three new MNTs had to be found to help look after a £2bn DB scheme with 13,500 members.

The trustee board enlisted the help of senior company managers and HR, and an election campaign was created by communications consultancy LikeMinds together with healthcare company Janssen, a Johnson & Johnson subsidiary.

To generate interest, the role of ‘trustee director’ was advertised to active members and pensioners as being of similar importance to a board director role. The intention was to appeal to employees looking to develop into a leadership role, as well as to retired senior managers.

Trustee board chair Angela Hamlin said the board decided to engage with company leaders to maximise the talent pool.

“Our approach was to promote the seniority and value of the trusteeship role and the unique opportunity to be challenged and develop new leadership skills and knowledge,” she said.

The multinational used a set of multimedia materials to do this. A senior leaders’ engagement event was held and followed by a leaflet desk drop, poster and email campaigns, as well as the launch of a new microsite.

For those interested in being nominated, the company also ran an awareness and training day. Following the campaign, 14 nominations were received and nine nominees were put forward for the ballot, from which three were elected for the roles.

“This was a great result for us… We have been delighted by the contribution the three new members have already made to the board,” Hamlin said. 

Of the three elected MNTs, two are active and one is a pensioner member who was re-elected for another term. Two have backgrounds in finance and one in project management. They also bring relevant experience, as one had dealt with pensions administration in previous roles, while another is trustee of a charity.

Moira Throp, director and co-founder of LikeMinds, said the board wanted to attract high quality candidates who would be able to contribute proactively and engage with trustee decision-making.

"There are three subcommittees and each one needed to be led and run by one of the trustees – so, for communications, admin and investments, it meant they needed people who were confident enough to handle the professional advisers, ask questions and get to a good result," she said.

A company reorganisation was also behind Johnson & Johnson's greater effort in seeking trustees, she said. "There was some sense of uncertainty amongst employees, which meant that re-engaging them to commit to something like this was going to need more effort and focus."

More can be done

A dual approach, where members are first selected based on suitability before standing for election seems to be a common way of proceeding, said David Weeks, who co-chairs the Association of Member Nominated Trustees. 

He said trying to get new or younger members to stand as MNTs in particular can be hard. “If you want to get them to come forward you need to do a bit of outreach work.”

Weeks noted that there is no institutional procedure to ensure companies canvass widely, and pension funds are reliant on whether the individual in charge at the sponsor is interested in the issue. 

Peter Askins, director at professional trustee company ITS, said companies had much greater responsibility than they assume at the moment, both in appointing appropriate nominees and facilitating MNT appointments. 

“Finding the right people is key, and employers have a responsibility to engage. These things represent huge risks to sponsors,” he said. 

Weeks said the main qualities a lay trustee should have above all others are the ability and willingness to question the experts. 

He said it is important “not to be afraid to ask questions which may be thought to be a bit obvious, but maybe in being obvious may reveal obvious deficiencies”. 

A good MNT, agreed Askins, needs an ability to understand, question and challenge. “They need to be… willing to do training and keep up to date”. 

Ultimately, “a trustee is a trustee is a trustee… they are all the same in law”.