TPR: Trustees show ‘increasing willingness’ to embrace D&I

In a blog post published on November 22, TPR executive director of policy, analysis and advice David Fairs gave an update on the work the watchdog is conducting in this area, after recently publishing its action plan to boost boards’ diversity and inclusion.

Fairs noted that TPR has been engaging with trustees about this topic through its supervisory approach, looking to “gain valuable insight into the issues schemes face when working towards greater diversity and inclusion within their organisations”.

“It gives us an opportunity to identify good and best practice, identify barriers and understand which trustees are engaging with our guidance,” he said.

So far, TPR has heard that barriers to change include “complex scheme structures, slow rotation of trustees, long tenures and a need to ensure new trustees have strong industry knowledge so that they can govern effectively,” he added.

TPR research published in September showed that more than one-third of the pension schemes that collect trustee diversity data have no intention of using it.

The watchdog has been encouraging schemes “to explore ways they can gather, interpret and use data to bring about change across their organisations”, including updating their recruitment processes to improve diversity, Fairs noted.

The regulator is also supporting schemes to review their succession planning and to implement assessments “to ensure boards are made up of capable trustees from diverse backgrounds”.

Fairs said: “Anecdotally, we have found that where the chair of trustees is committed to change, this is a good indicator that a scheme will more successfully implement measures to improve diversity and the robustness of decision-making for all savers.

“We can see from our engagement with industry that while change is not easy and may take time, many trustees are showing increasing willingness to embrace diversity and inclusion.

“They appreciate how crucial these priorities are to ensuring that decision-making reflects the needs of all savers.”

TPR implemented a new diversity and inclusion strategy in 2021, while also creating an industry-led diversity and inclusion working group made up of more than 60 industry representatives in a bid to help boost diversity on trustee boards.

The regulator said in September that it is working with the group to produce a series of guides, case studies and tools for trustees, employers and their advisers. It will aim to publish this guidance by the end of the 2022-23 financial year.

TPR also said at the time that it is exploring “developing a suitable mechanism for collecting data in the longer term to measure progress”, which could include running periodic trustee surveys, including questions to the scheme return or service for data reporting and measuring progress using existing yearly surveys.

It pledged to decide on a mechanism for collecting diversity data by the end of the 2023-24 period.