The Pensions Trust takes names off ballot to reduce bias

In an addition to this year’s election, which is currently ongoing, candidates’ names were withheld and members were instead presented with a short biography of each.

Some board members were very pro the idea and others said 'this is PC gone mad'

Sarah Smart, Pensions Trust

There is a growing focus on the lack of diversity in the asset management industry. Last week, it was reported that newly appointed chair to the Investment Management Association, Helena Morrissey, who is also chief executive officer at asset manager Newton, would overhaul its board to create greater diversity.

The Pensions Trust has a broadly elected board, with 10 members voted for by the membership and employers, plus a chair and one appointed director. Currently, there are eight elected men and two women, all of whom are all white.

Sarah Smart, chair of the trustee board at the third-sector multi-employer scheme, and a long-time advocate for diversity on boards, said she had become interested in the area of“unconscious bias” and had also read research on names and how people tended to trust “simple names” over more complicated ones.

Prior to the elections, the trust held candidate information days and received interest from a diverse group of people. “There was a [candidate] who asked some very good questions, and who I thought would be a very good trustee, but I thought, ‘I wonder if the name would put people off’,” Smart said.

She brought the idea of unconscious bias to the trustee board. “It was very hotly debated,” she said. “Some board members were very pro the idea and others said, ‘This is PC gone mad’”.

Smart added: “We didn’t actually have any robust evidence ourselves to suggest that people were being disadvantaged… So we debated it again and we agreed as a board that we would like to take out the possibility of unconscious bias as much as possible.”

Independent pensions actuary Margaret de Valois said this idea could result in a fair judgment as members would be looking just at the candidates’ skills and experience.

“It should take any bias out that people might have,” De Valois said. “But we do know that one way of getting more diversity is by positive discrimination.”

She gave the example that if two candidates were tied, some boards may choose the woman or minority, but added that most boards struggle with having enough candidates, and the idea of board diversity has been shunted down trustee agendas.

How members reacted

Members were sent a form with candidates listed as A, B, C or D with a short pitch on why they should be a trustee. While the vote is still ongoing, the trust has received some feedback on the anonymous forms.

Smart said: “Interestingly we had one individual… who phoned up and said, ‘This is ridiculous. I like to see the names because I don’t want to vote for a woman’. Which as far as I’m concerned completely justifies exactly what we are doing.”

There has also been a case of a woman complaining that she would like to see the names because if she was unsure of who to vote for, she would prefer to vote for a woman.

Members were also given the option to vote online. Smart said following the vote it will analyse whether anonymous ballots were suitable for future elections.

Richard Butcher, managing director at trustee company PTL, said there is plenty of evidence to support that more diverse boards are better. “But I do struggle with the concept of positive discrimination,” he added. “I’d hate to see an all-women shortlist… you could be excluding some really good male candidates.”

The trust announced in its summer bulletin that elections for member and employer-nominated directors would be held every two years, with new directors taking office in October.