TPR looks to increase diversity on trustee boards

The strategy, announced on Thursday, details how the regulator aims to create a fairer and more inclusive culture across the pensions industry and work with others to address inequality among savers.

The document sets out new targets that will ensure TPR meets the aims of the strategy, such as being a fair, diverse and inclusive employer. 

The watchdog is also looking to build a collective understanding of why pensions inequalities occur, and work in partnership with others seeking to reduce them and to promote higher standards of equality, diversity and inclusion among its regulated community, it stated.

On the latter, TPR aims to start working with its regulated community by the end of 2021, including through the new board diversity industry working group, so that a plan for scheme governing bodies to become more diverse can be put in place.

This working group, which had a first meeting in January, was set up by the regulator to address the lack of diversity and inclusion among pension-governing bodies, and will set out an action plan later in the year, the document stated.

Internally, TPR aims to reduce pay gaps for under-represented groups and increase the diversity of their workforce by 20 per cent by 2025.

The regulator also plans to increase black and ethnic minority and LGBT+ representation across their executive and senior leadership teams, to at least 15 per cent of their senior teams within the next two years. 

Sarah Smart, chair of TPR, noted that “now, more than ever, organisations and employers are being called on to take a lead in bringing about a fairer and more inclusive society”.

She said: “Through our strategy, we are clear on our ambition for positive and lasting change across our own organisation, and the industry we regulate, to drive down inequality among savers. 

“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.

“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.”

This topic was discussed in a webinar on Thursday organised by Buck Consultants, where Elizabeth Bostock, senior benefits consultant, noted that having a board made up of different types of people, backgrounds, upbringings and roles will allow issues to be approached from different angles and bring new perspectives to the table. 

Bostock quoted figures from a 2016 survey by the Pensions and Lifetime Savings Association, which showed that 83 per cent of trustees were males, and 50 per cent of chairs were aged over 60. Only 5 per cent of boards had just more than 50 per cent of female trustees. 

She said: “We know there is a problem that needs to be addressed here and there are ways in broadening the appeal of trusteeship.”

Bostock argued that the best way to implement changes in pension boards is for those in charge to ask themselves whether diversity and inclusion is factored into their processes, how they can minimise unconscious bias in their selection process, and to consider the introduction of a policy to articulate what the objectives are and how these will be achieved.

She also noted that schemes should include their members’ views in this area, so that trustees “can work on their feedback and engagement”.