On the go: Trustees should think about the diversity of their scheme’s membership, and consider whether they are “inherently disadvantaging” some members with their decisions, according to David Fairs, the Pensions Regulator’s executive director for regulatory policy, analysis and advice.
In 2021, the regulator implemented a new diversity and inclusion strategy, which aims at increasing diversity on trustee boards. It also launched a new board diversity industry working group.
A blog written by Fairs in December also pushed for “difficult trustee board decisions” about diversity.
In a podcast discussion with Herbert Smith Freehills partner Samantha Brown, Fairs stressed the need for trustee boards to think about how their members’ diversity might influence the actions and decisions they might take.
“Are they inherently disadvantaging some members, perhaps unwittingly, which if they thought about it carefully would they make the same decision, knowing it might not be understood or help all their members equally?” Fairs asked.
Trustees should think about the diversity of the trustee groups and even that of their advisers and the professional trustees who might be embedded within their structures, he added.
The regulator is putting together tools to help trustees with role descriptions, finding ways to attract those who might not have considered taking on the profession or might have thought that they would not be welcome to the role.
“They’ve got to think about the process of how they get trustees on board,” Fairs said.
“Does that unintentional bias for, or against, some members [exist], and does that deprive the trustee body of some skills, some expertise or particular insights?
“Time and again, you see trustee roles being phrased in terms of ‘many years of financial, legal or investment experience’. But I think you have to ask, does that get you the people who know about communication using social media? Who understand climate change, natural capital or shariah funds?”
Boards should also consider whether they make roles accessible to those with disabilities, caring responsibilities, and those who work part time, he added.
Last year, TPR said that it aims to reduce its internal pay gaps for under-represented groups and increase the diversity of its workforce by 20 per cent by 2025.
The regulator also said it sought to increase black and ethnic minority and LGBT+ representation across its executive and senior leadership teams, to at least 15 per cent of their senior teams within two years.
