Trustee boards display unacceptable lack of diversity

An increasingly broad body of academic work shows that cognitive diversity, which can be encouraged by the inclusion of different protected characteristics in decision-making groups, can lead to better overall decisions and outcomes for members.

Yet 83 per cent of trustees are male according to PLSA research, and evidence suggests most boards are predominantly white, middle-aged and middle class.

The PLSA found that trustee boards badly lag corporate boards, where 32.1 per cent of board members are female and 53 per cent of boards have at least one BAME member.

Adding to these findings is the sense that prejudice is rooted in trustee boards and other parts of the industry, further limiting the sector's ability to include those from more diverse backgrounds.

At a panel session on Friday, leading lawyers, asset managers and trustees recounted their experience of ageism, homophobic stereotyping and racial prejudice – even including the use of racial slurs in board meetings.

In reaction, the PLSA has published guidance on how trustees can make a difference to this situation. The document covers the meaning of diversity and inclusion, what benefits it can bring and useful steps to improve it.

The guide suggests steps such as developing a formal policy on inclusion, anonymising applications to be a trustee to remove prejudices, and fostering a culture of mentoring and mutual support.

For some boards the truth that decision-making is hampered by homogeneity may be difficult to accept, according to Daniel Gerring, partner and head of pensions at Travers Smith.

"What this industry is missing out on, if it doesn't change, is a great talent pool and a great potential to make an impact on members' outcomes," he said. "Have a look at the guide and think about whether you're the best board you can be to generate member outcomes."

The full guidance can be accessed here.