At Governance Matters 2024 Client Director Simon Lewis chaired a panel of experts in discussing how having diversity and a range of skills on your trustee board can make it more effective, creating better outcomes for pension scheme members.

The context for this was around TPR’s Equality, Diversity and Inclusion guidance to trustees and employers from March 2023, the General Code which has a big emphasis on the Chair and Trustee Board’s effectiveness, and finally the government’s ongoing consultation with the industry on trustees being fit and proper for the role they undertake.

Joined by Sharon Bellingham (Mastertrust Lead at Scottish Widows), Paul Mehra (Training Consultant at Strengthscope) and Louise Lindsay (Chair of the SAUL pension scheme), Simon’s top three take aways were:

1. It is key to understand people enough to leverage their strengths and how they work at their best

2. How to optimise diverse input is a consideration at all stages of Scheme business, and not just the meeting room for a board to be effective

3. Awareness, feedback and training is fundamental in aligning resources to be drive continuous improvement and high performance amongst trustee boards

But let’s see what our experts said!

“How does an appreciation of individual and team strengths support the efficiency of the team and drive improvement in team dynamics?”

Paul: The first thing to be clear on is what do we mean by strengths in this context? Our definition at Strengthscope is inner qualities that energise us and that we’re great at or have the potential to be great at.

Strengths are different to skills. We can learn skills, but our strengths are what we’re truly energised by. Combined with our learned skills, knowledge and experience, understanding our strengths helps us to be more productive and effective in our work.

Understanding strengths can help trustee boards become more effective by helping trustees to discover what energises them and giving them a better understanding of why they enjoy certain types of work.

As individual trustees talk to their fellow board members about their strengths, opportunities are opened up for people with different strengths to compliment each other. This is particularly important when considering things like the effective system of governance (ESOG) where work needs to be done on a broad range of topics across various formats. Different parts of the ESOG will energise different trustees.

Having a trustee board with a diverse range of strengths makes pension trustee boards allows the board to cover all the issues they come across more effectively.

“What does diversity mean in respect of a pensions trustee board, and why is it important to you? How do scheme advisers and in house resource play into board effectiveness?”

Louise: From a trustee perspective, we are looking for the best outcomes for members. The pension landscape is ever changing and the future uncertain. We need conscious and thoughtful debate on options open to us.

Diversity in thought and contribution is key to avoiding group think. We need to bring different perspectives to our board discussions and this comes from diversity in contributors. Diversity can come from a mix of gender and ethnicity, for example, but I would argue it is much wider than that. It can also come from socio-economic background or thinking styles. It can include third parties you work with as a Board. It can include member voice. 

Diversity doesn’t happen organically. It needs to be a conscious consideration in preparing proposals, committee membership, succession planning, reviews, communications and training. SAUL has undertaken a number of initiatives in this space which we have seen the benefit of in terms of more robust debate and more ideas being shared by our trustee board.

“Why do training on EDI? What positive changes have you seen as a result? What are the risks of no action?”

Sharon: As part of the Scottish Widows Mastertrust we work with a diverse set of trustees and other stakeholders. As such, diversity is always a key consideration for us and it very much runs through the veins of our organisation. EDI training is always important when you’re dealing with a group as broad as the membership of a pension scheme. We firmly believe embedding EDI leads to better decision making and how we support our members and their diverse needs.

In previous roles, bringing in external EDI training experts has been really valuable. Not only is EDI training the right thing to do, but it helps boards make better decisions, improves trust and empathy.

As a Mastertrust there are additional expectations on us from The Pensions Regulator but we’re also keen to embrace and really be at the forefront of EDI. Intermediaries also measure master trusts and their boards from an EDI perspective.  

Our Chair of trustees has been fantastic in leading our EDI journey, but EDI is broader than the pension scheme trustees – it’s something that should be considered holistically, across the whole of a pension scheme, including how we engage with members. Taking that first step on the EDI journey can be challenging.

That first step is the most challenging but simply starting to think about what EDI means and how it can support members is likely to drive the discussion. EDI is much more that board diversity, it’s how we go about designing tools, experiences and services which help members and their diverse needs.

This roundtable was held on 12/11/24 as part of Governance Matters 2024.