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Governing bodies: EDI guidance

Detailed guidance to help governing bodies and those with the power to appoint trustees improve Equality, diversity and inclusion (EDI).

 

Published: 28 March 2023

Overview

Pension scheme governing bodies have legal duties to scheme members, and good decision-making is key to ensuring those duties are met. EDI supports robust discussion and effective decision-making and is an important consideration for schemes (including their sub-committees).

This guidance provides practical ways and examples to help governing bodies and those with the power to appoint trustees improve EDI. It does not override or limit any other relevant regulator publications relating to trustee boards.

It also does not provide a legal view on issues that some schemes may encounter, and you may wish to seek your own advice.

We recognise that different scheme types, sizes and sectors may pose different challenges to achieving EDI. There are quick and easy steps that some schemes can and should take to improve EDI now. We recognise that other steps to realise EDI ambitions may need to be a medium to long-term aspiration for some schemes.

You can also read our EDI guidance for employers.

The governing body

Where we use the term ‘governing body’, we include trustees and directors (where the trustee is a company) of occupational defined contribution (DC) schemes, master trusts, defined benefit (DB) and hybrid pension schemes, as well as scheme managers and pension board members of public service pension schemes (board members).

When describing trustees, we mean this to also include scheme managers and pension board members of public service pension scheme and directors of trustee companies where the trustee is a company.

The role of the chair in promoting EDI

An effective chair plays an important role in driving and promoting EDI on governing bodies. It is the chair who sets the tone for discussions surrounding inclusivity, embedding it in the culture of the governing body and ensuring that any EDI policies are followed.

Throughout this guidance, we highlight the specific ways in which the chair can support improvements in EDI.

Getting started with EDI

EDI training

EDI is a fast-developing area, so it’s important to keep up to date with training. The scheme’s employer sponsor may provide EDI training, which the governing body may be able to access. Many professional organisations both within and outside of the pensions industry offer training, some of which is free of charge.

Case study – training at a strategy away day

The trustees were given EDI training from an external expert, and then put together a useful and practical half-day on EDI as part of a strategy day. This involved discussion on how to apply it to scheme governance including:

  • the role of EDI in board effectiveness and decision-making
  • trustee ways of working
  • amending the trustee selection policy to improve diversity
  • considering EDI when developing member communications and experience
  • how members’ voices can have a greater effect on trustee work

Develop and maintain an EDI policy

Having an EDI policy ensures everyone is clear on what behaviour is expected of them and helps solve problems if they arise. If it’s implemented properly, it will give confidence that there is a collective commitment to treat everyone fairly. Some schemes may wish to put EDI principles in place first, which they can later build into a policy. Generally, EDI policies cover:

  • an agreed definition of EDI
  • the EDI aims of the governing body
  • an EDI training plan for the governing body

Once the policy has been developed, you can identify the success criteria and actions you want to take to achieve your EDI objectives. For example, developing an improvement plan to discuss at meetings and agreeing actions and principles relating to matters such as trustee appointments and member communications.

You could:

  • test your policies, procedures, governing documents and communications against an agreed definition of EDI
  • align aspects of the governing body’s policy with your employer’s EDI strategy, policy and definitions
  • introduce EDI training during the induction process and refresher training at appropriate intervals
  • use your employer’s EDI training materials
  • highlight the EDI policy to your members through publications and progress updates

The role of the chair – lead EDI progress

Lead progress towards meeting EDI objectives and any agreed EDI actions (at governing body and sub-committee levels). If this is not possible, record the reasons why. Some objectives may be easily tracked (for example, by introducing a policy change), whereas others will be broader (for example, a behavioural change).

Plan for governing body recruitment to meet the needs of upcoming priorities and challenges. Consider the skills, knowledge and experience that could further those goals and the benefits of diversity in improving decision-making.

Assess the performance of the governing body

Any performance assessment (PDF, 174kb, 7 pages) of the board, individual trustees or advisory firms should include how well EDI has been, and continues to be, embedded into your processes.

EDI objectives and goals

Agree these at the start of the scheme year. Include ways to achieve a diverse and inclusive governing body, for example engaging with the employer on employer-nominated selection criteria. The goals will be scheme specific.

Annual review

The governing body should give their views on how they consider EDI has been embedded into meetings (as often as required). This review can take different forms, for example a facilitated discussion, anonymised survey or another approach that works best for your governing body.

Consider the best way to encourage honest and constructive feedback. The review could include questions on how well the chair has:

  • encouraged views and opinions on the matters which have been discussed throughout the scheme year
  • supported and included trustees
  • sought views from trustees before giving their own
  • engaged with trustees in and outside of meetings
  • kept trustees informed of interactions they may have had outside of meetings, for example with advisers or the scheme’s employer

Employer support for EDI

When selecting and appointing employees of the governing body’s sponsor, employers often seek to appoint senior people. They are perceived to have authority and gravitas and are assumed to have the ‘right’ skills and experience for the governing body.

Enhance diversity on the board

We encourage employers to consider widening the pool of candidates to include those outside of senior management positions, who can also bring valuable skills and life experience. This is likely to enhance diversity and provide the governing body with a relevant mix of people drawn from different parts of the business. The scheme could then support these new trustees by providing relevant training and a structured induction process, along with other support such as buddying, mentoring and shadowing.

Engaging with the employer to raise their awareness of the trustee role and the value it can add to their employees’ personal and career development should help with this.

For master trusts, it’s important that the trustee board engage with those who have the power to appoint trustees to understand and support the EDI ambitions of the board.

The chair will need to have open, trusted lines of communication and contact with the employer/appointee on EDI. Aim for a suitably inclusive working relationship that, where possible, serves to align the governing body and employer/appointee EDI objectives, if appropriate.

See our EDI guidance for employers for more information.

The role of the chair – engage with the employer/appointee

Share the benefits of diversity and the skills gaps on the governing body

This is a relevant consideration for the employer when selecting any new employer-nominated trustees and for those with the power to appoint trustees to master trusts. This should be an ongoing dialogue as the make-up of the governing body changes and the requirements of the scheme evolve.

Involve them in developing the chair role succession plan with an EDI focus

Potential candidates could be drawn from the existing governing body (if appropriate) or externally. If there are possible successor chairs already within the governing body, then they could be mentored by the existing chair to support their development.

Discuss the benefits of shadowing and buddying

This will support the development of new employer-nominated trustees. See the ‘Shadowing, buddying and mentoring’ section.

Case study – working with the employer to support diversity on the trustee board

The chair of a DB scheme was faced with the challenges of rapid change in the employer’s senior team and a business strategy that was negatively impacting the covenant. The governing body worked up a short list of concerns, along with some positives about recent developments, to discuss with the employer, as well as longer-term objectives (including EDI objectives).

This discussion created an opportunity to raise the skills gaps on the trustee board and the desire to improve diversity. As a result, a list of potential candidates for a future vacancy was drawn up, taking into account the skills gap and EDI objectives. This paved the way for trustees to get to know the UK CEO, which improved mutual understanding of constraints and responsibilities. This led to better engagement on plans for the scheme.

Planning for change: review diversity on the governing body

Identifying gaps

Improving EDI starts with an assessment of your governing body’s diversity of characteristics, life experiences, expertise and skills (both broader skills and technical knowledge – using a skills matrix can be helpful in this context, see skills and experience). Any review should be regularly updated.

For example:

  • If you have a significant proportion of members under 30, do you have the perspective of anyone under 30 represented within your governing body?
  • As the prevalence of disability increases with age, have you had the input of anyone with disabilities to assist in identifying potential issues for this group? This could be whether any online facilities being offered are sufficiently accessible and meet the needs of this group, or whether the way in which ill health benefits are considered could be improved.

The governing body composition

There are many issues to consider when putting together or altering the composition of a governing body, such as:

  • size and diversity
  • current trustees’ skills and experience
  • the balance between having enough people to carry out duties and being too large to operate effectively
  • extra costs of having a larger governing body if trustees are paid
  • whether a shorter-term increase of appointees is appropriate to help existing trustees continue while refreshing skills and adding new perspectives – this can be part of a planned transition to a smaller, more diverse governing body over the medium to longer term

New trustees bring fresh perspectives

The selection process, even an appointment by the employer, should prompt you to:

  • reflect on the merits and challenges of the role, and how they can support a new trustee
  • consider issues, such as key person risk, future participant turnover, skills and knowledge gaps both at board and sub-committee levels
  • encourage those with the power to appoint to address any difficulties in finding suitable trustees
  • update role specifications on the qualities, characteristics, skills, knowledge, experience, to enrich the governing body
  • review and update its succession plan for governing body participants

The make-up of the governing body will be determined to some extent by the governing documents of the scheme and the trustee company articles of association.

The role of the chair – encourage diversity

  • Lead engagement with other trustees and the employer (and any other nominating bodies) on the skills, knowledge, experience required, or of benefit to the governing body, or any sub-committees to support effective decision-making.
  • Ensure any member-nominated trustee (MNT) campaigns have an EDI focus.
  • Put a succession plan in place and regularly update it to reflect the importance of EDI.

Succession planning

Succession planning and thinking ahead are key to improving EDI across a governing body.

  • Set clear objectives.
  • Understand when tenures are due to end and the skills and experience that will be needed.
  • Objectives must be achievable and you should track progress.
  • Allow individuals outside the governing body to shadow trustees to encourage applications, see the ‘Shadowing, buddying and mentoring’ section.

Nominating/selecting and appointing MNTs.

  • Consider using an interview process or selection panel (either in place of, or in addition to, a ballot process), subject to legal requirements. An election process may discourage potential candidates from applying for the role. See the ‘Selection rather than election of MNTs’ section.

Succession planning for the chair

The appointment of your scheme chair may be set in the scheme’s governing documentation. But you must take steps to ensure that the process they follow is robust, so that the new chair is right for the role. Even if the right of appointment sits with the employer, you can recommend a process for them to use.

Agree the process and handover period

  • Do this well in advance with the other trustees and engage with and seek the views of the employer.
  • Decide how the governing body can provide input to the chair skills being sought.

Work out the interview process

  • To gain different perspectives on what you need from a new chair, a small panel can work well – with the employer lead (or in the case of multi-employer schemes, someone with the power to appoint), an agreed trustee, an adviser and the company pensions lead.
  • Consider whether the panel has an appropriate level of diversity or whether another member of the trustee board could widen the skills, experience and characteristics you want to represent in your decision-making.

Feedback and performance reviews

  • Give other trustees the chance to chair meetings by rotation with regular feedback (from other trustees as well as the chair).
  • Get feedback on the performance of sub-committee chairs.
  • Conduct regular performance and development reviews with individual trustees and provide them with training and leadership opportunities.
  • Consider whether to appoint a professional trustee for the role.

A current chair who wishes to be reappointed should not be part of the selection process for conflict reasons. However, they should work with the other trustees and the employer on a succession plan and timescales for their role, so the transition and handover are well managed.

Fixed-term appointments

It is common for MNT positions to have fixed terms (usually between three to five years). Some governing bodies specify the maximum number of terms a trustees can serve. This can be beneficial as it encourages a scheduled change of individuals on the trustee board bringing new personalities, dynamics and perspectives to the group’s decision-making.

Fixed-term employer-nominated trustee (ENT) positions are generally uncommon, and often people stay in these roles for several years. This can be beneficial, as longstanding trustees may be knowledgeable about pensions, the scheme and employer.

However, limiting new appointments can make it harder for boards to meet their EDI objectives (unless the size of the board is increased, as described above). In the case of professional trustee positions, it’s possible to change the individual representative from the firm over time to support diversity on the board.

When thinking about fixed-term appointments, consider staggering the turnover of roles so that they don’t all start and finish at the same time. This will protect the scheme from the risk of losing scheme-related knowledge in a short period of time. This should mean the resource used to support new trustees getting up-to-speed is staggered.

Encourage an inclusive governing body culture

Pensions work is often complex. Different views can be healthy, and helpful to your work and decisions. They can highlight where trustees’ different understanding and assumptions are serving to improve or impede progress. Harnessing diverse views can help weigh issues in more detail and openly consider aspects that may be important to those impacted by decisions. This enables all those involved to better understand and mitigate scheme risks, avoid unintended consequences, and learn from what is working and what is not. This may mean that discussion and reaching a decision takes more time but encouraging diverse contributions can challenge group thinking (the tendency of a group to make bad decisions because its members do not want to express opinions or suggest new ideas that others may disagree with).

Role of the chair – open and inclusive culture

You can play a leading role in shaping the bridging skills (the ability to genuinely associate with individuals who are different to you), adaptive thinking, culture and behaviours of the trustees on your board to be more diverse and inclusive. This will promote good decision-making and skilled engagement with stakeholders. You will need skills such as openness, active listening and perspective to gain support easily and be a successful leader. To benefit from diversity, there should be an inclusive environment on the governing body, where everyone can contribute.

Provide an open and inclusive culture

  • Encourage full participation – a key strength of any team is its diversity of thought.
  • Make progress on EDI objectives – a regular agenda item in meetings.
  • Create an environment where all trustees can voice their opinions regardless of topic.

Give and receive feedback

  • Invite regular performance feedback at the end of meetings.
  • Make sure everyone gives and receives feedback on decisions before finalising the action plan to generate shared responsibility.

Understand personalities and unconscious bias

  • Learn how trustees interpret information and approach issues.

Make adjustments to meetings

  • Enable divergent or individual thinking and include practical ways to help individuals and the group to be effective.

Adapt to working styles

  • Clearer papers, preparation time for meetings, chairing to encourage contributions and training that fits with the group’s range of learning and communication preferences.

Work with advisers

  • Ensure enough clear information is provided, to enable the governing body to understand the issue.
  • Provide introductory training if the subject matter is complex and/or there are new trustees.
  • Ask trustees before meetings if there are any areas they would like covered on the agenda.

Make communications accessible

  • Help decision-making by presenting information in different ways or ask questions that are accessible.
  • Prevent any confusion by making sure there is a collective understanding.

Create open and engaged discussions

  • Ask other trustees to share their views before you express your own.
  • Consider the group dynamic and the impact this is having on an open and engaged discussion.
  • Follow up with disengaged trustees.
  • Clarify how to pronounce people’s names and understand their preferred pronouns and ensure these are used correctly by you and the other trustees.
  • Encourage everyone to listen to each other’s perspectives – to build upon other people’s ideas.

Get to know the trustees

  • Hold one-to-one sessions on a regular basis to discuss matters that are important to them.
  • Create a safe space to share their views with you.
  • Encourage trustees to get to know each other by working in teams to generate ideas on different issues.
  • Encourage trustees to interact on a regular informal basis.
  • Arrange a strategy day with some informal time to build relationships and inclusivity.

Chair for desired behaviours and bias awareness

Signs of inclusion problems on a governing body include trustees staying quiet on something they think matters or agreeing with more dominant people in the group. Group think and authority bias (the tendency to be more influenced by the opinion of an authority figure) are likely to undermine your ability to make the best decisions.

Role of the chair – solve inclusion problems

Your ability to pre-empt these problems in a skilled way will encourages self-awareness among trustees and others involved. It underpins an open and collaborative culture, to encourage effective questions and improve challenge and oversight, which ultimately should lead to better saver outcomes.

  • Encourage the use of sub-committees where appropriate, to give other trustees the chance to gain experience chairing a meeting and build their confidence in speaking up.
  • Be aware of your own behaviours and likely biases and aim to manage these in your chairing style to encourage contributions during discussions.
  • Invite what may seem a basic or ‘what if’ question to aid understanding and open-up issues for debate.
  • Give timely praise and constructive feedback.
  • Agree how trustees should challenge unhelpful behaviours or question apparent biases in a de-personalised way, so that interpersonal problems do not fester. It needs leadership skills and resilience from you to establish and embed this. It helps make meetings more enjoyable and increases the chances of work being timely and having the desired impact for trustees’ interests.

Reasonable adjustments

Candidates and existing trustees with disabilities or health conditions might need adjustments made to premises, equipment or technology, ways of working, or even to the role itself. Adjustments are specific to the individual, but some examples include:

Extra time and work

  • If the role comes with an expectation that the trustee will sit on a particular sub-committee, this may involve more time and work, which may be difficult for some to commit to.
  • If the role requires membership of a particular sub-committee, consider if those sub-committees could be reduced in size, if meetings could be held at alternative times, or if other trustees can join instead.

In-person meetings

  • Attending meetings in person may be a barrier for someone with a disability, health condition, or caring responsibilities.
  • Some trustees may require additional measures to allow them to participate fully in meetings such as wheelchair access, nearby accessible toilets, live subtitling or captions, a hearing loop, audio-description of any diagrams, a personal assistant or guide dog.
  • Some trustees may require papers to be provided well in advance of meetings and may need these in a particular format.

Reasonable adjustments to the selection process

This might include allowing access to interviews remotely or providing braille or large-print documents in advance.

While candidates may request adjustments to the selection process itself, those with disabilities or health conditions are not obliged to disclose these and it is important not to imply that disclosure is a requirement.

When setting criteria for selecting trustees (as well as assessing existing ones) you should consider whether reasonable adjustments should be made to those criteria for candidates with disabilities or health conditions. Many common requests are low cost or free.

Trustees and employers are likely to be subject to duties under the Equality Act 2010 and may need to seek advice.

Case study – reasonable adjustments

A new MNT was selected to join the board. The chair invited them to an introductory meeting at the head office of the sponsor after work. As someone with a chronic health condition, attending in-person meetings was difficult so the new MNT asked to attend the meeting virtually.

The chair discussed the matter with the HR team, as at interview stage they were not aware that the candidate had a chronic health condition. Through this discussion, they learned that they were not obliged to disclose their disability. Many disabled people do not disclose their condition at work because of concerns that they will be treated differently.

An adjustment was agreed that the new MNT would attend virtual meetings during normal working hours, as working longer hours worsened their health condition.

The trustee board understood that having someone on the board with a chronic ill-health or a disability could be beneficial, given how often the trustees need to consider or engage with members or beneficiaries who have ill-health or disability.

Shadowing, buddying and mentoring

An inclusive environment is one in which individuals have the support they need to flourish. Steps can be taken to support new trustees by allowing organic, positive relationships to grow between new and experienced trustees, for example, through one-to-one shadowing, buddying or mentoring. This could help new and existing trustees to be more confident and productive in their roles.

Case study – shadowing

The employer identified possible employer-nominated directors (ENDs) vacancies well in advance. They introduced a buddy programme to give potential candidates practical understanding of what the trustee role involves before applying. They were assigned to a trustee director to act as a buddy for questions.

This helped them build up knowledge of the scheme and pensions and encouraged more people to put themselves forward.

Supporting different ways of learning

It’s vital that current and prospective trustees are not deterred when facing an imposed learning style which does not suit them – whether that is ‘dry’ written briefings from advisers or training sessions which assume too high a degree of knowledge.

Role of the chair – training needs

Take steps to ensure that the scheme’s advisers and the current trustees engage positively with the new appointees to support their training needs, as well as considering the ongoing training needs of the governing body. While new trustees may have knowledge and understanding gaps, the reason for their selection is likely to be that they bring different skills and experience which would benefit the wider governing body – so think about how to leverage that for the benefit of scheme members.

Case study – recognising individual learning styles and training needs of trustees

A new MNT joins just before the scheme’s triennial actuarial valuation. The scheme actuary provides training during a governing body meeting, and assumes that everyone is familiar with pensions terminology and complex topics.

During the meeting, some experienced trustees asked a few detailed questions on specific points previously raised. But the new trustee is left feeling unclear on many aspects of the valuation and was unable to ask questions.

After the meeting, the chair considers whether she could have been more inclusive in her approach at the meeting. As a result, they suggest further support and training for the new MNT, along with discussion on preferred ways of learning.

Recruitment: ways to attract more diverse candidates

Appoint professional pension trustees

If you find it challenging to address diversity gaps through MNT and ENT positions, independent or professional pension trustee positions could improve diversity on the governing body.

Isio’s 2022 Professional Independent Trustee Survey (PDF, 14.1MB, 17 pages) reported that the profile of professional trustee firms’ teams is getting younger and more diverse, as trusteeship is seen as a career. They also reported that in 2022, some tender processes had more direct requirements for diverse candidates.

Many firms have made public commitments to EDI and have EDI policies and practices in place. Professional trustees' accrediting bodies also provide training in diversity and inclusion.

Some professional trustees can be sole trustees, where there is a single trustee appointment for the pension scheme. To ensure that sole trustees are still able to implement EDI and improve decision-making, many use 'shadow' diverse boards within the professional trustee organisation so that decisions are not made by just one person. We would encourage any employer or governing body that’s considering replacing the governing body with a sole trustee, to make sure that EDI is forefront in that decision.

Deferred members

DB pension schemes are maturing, and many schemes are now closed to new members. This means DB schemes typically now have larger deferred and pensioner populations, and fewer, if any, active members. MNT processes should seek candidates from at least active and pensioner members. In the case of DC schemes, it is important to understand the deferred members experience, for example, do they have the same access to tools and information when there is no longer a link to the employer.

Many pension schemes still do not include deferred members in their nomination processes, despite this population often being large. A larger population provides more scope for diversity.

There are often concerns around deferred members working for competitors in similar industries, and therefore concerns that if they are appointed as trustees there could be conflicts of interest during covenant or funding discussions, for example. This means schemes might miss out on excellent candidates.

In practice, many concerns about potential conflicts of interest could be discussed during selection interviews and managed well during meetings, or by using conflict policies and confidentiality agreements.

Selection rather than election of MNTs

Members with certain characteristics may be less likely to apply if MNTs are elected, and this inhibits EDI. Although election is commonly used in MNT processes, it is not the only method of recruitment.

An alternative to the election of MNTs, is their selection (if permitted by the scheme rules /or the trustee company’s articles of association). Selection must involve some, or all, of the scheme’s members (and so cannot be done by the employer, or by the existing trustee board if it is comprised entirely of non-members). The code of practice module on member-nominated trustee appointments could help when considering appropriate arrangements.

Having reviewed EDI on the board, you may think that certain groups are under-represented, and you could encourage applications from these groups in the recruitment campaign wording.

If scheme rules allow it, and if relevant, the trustee company’s articles of association, the trustee board (provided it includes at least one scheme member) can select MNTs using a panel. The trustee board should design a selection process which incorporates principles of proportionality, fairness and transparency, and that avoids potential bias. Consider the diversity of the selection panel, as applicants can be put off if it appears that they do not fit the ‘model’ the selection panel represents. You could also ask external people who have relevant experience to sit on the panel for example, your scheme advisers. Those involved in the selection process would benefit from EDI training, along with training about unconscious bias.

Case study – selection process

The trustee directors had a vacancy for a member-nominated director (MND) which so far had proved hard to fill. Attempts to seek applicants from the scheme membership had not been successful.

The chair facilitated an assessment of the board’s diversity, skills and gaps, and the steps to encourage applicants from underrepresented groups for example, via the employer’s EDI network groups.

Some schemes recruit MNDs from a wider pool of scheme members, including the deferred membership, to find people who can bring valuable skills and experience to the scheme. To widen the member-nominated selection pool may involve minor changes to the scheme rules, the trustee company’s articles of association and the trustee’s MND policy.

The selection panel and the terms of a user-friendly communication was agreed. The advert described the role, the positive aspects of serving as a trustee director, and referred to the types of experience and skills currently underrepresented on the trustee board. It also emphasised that training and support would be available for the successful applicant. This advertisement was published on the member website and was sent out by email and post. It resulted in a good deal of interest, with over 20 applications.

The selection panel sifted these to a shortlist of five people to interview, from a variety of, ages, skills and interests. A Zoom call with the pensions manager and an MND was offered on two different days, to help shortlisted applicants understand more about the role and serving as an MND for the scheme. The panel then interviewed each person, using a framework and scoring system[1]  that helped them to fairly select candidates and recommend an appointment to the trustee board.

The candidates selected for interview that were not appointed were asked to stay in contact, as potential future candidates. Shortlisted candidates who were unsuccessful were offered an opportunity to input on a project around member communications. This has worked well, and the trustee directors are in the process of setting up some member communication panels which are likely to include these individuals.

Simplify the nomination process

If you decide to retain election rather than selection of MNTs then (if your scheme rules allow it), you could adapt the process to attract a more diverse pool of candidates by, for example,

  • requiring only one nomination
  • allowing candidates to self-nominate
  • a combination of methods, such as selection followed by election
  • considering maximum term lengths for existing trustees

 An important part of any process is the content of communications to potential candidates (DOC, 38kb, 2 pages)

Better communications about governing body roles

Workforces and members often have limited knowledge about the role of a trustee, what it involves, and the commitment required. This can deter applications from potential candidates with valuable skills and experience – for example, if they believe the role will not fit around their caring responsibilities, assume the role requires a specific level of pensions knowledge or education, or are unaware of the training and support available to new trustees.

Challenge this perception with clear messaging during the recruitment campaign. This could include:

Skills and experience

  • Focus on skills rather than specific ‘sector’ experience, pensions knowledge or specific qualifications (unless those are clearly necessary).
  • Example of required skills: able to challenge, negotiate, understand member perspective, willingness to learn, and fair approach to decision-making.

Skills gap

  • The board’s commitment to EDI and its objectives for the appointment, for example specific skills or experience gaps you want to fill or emphasise your aim to bring in new perspectives.

Training and support

  • Make it clear that a high degree of pensions knowledge is not required initially, as support is available to gain the required knowledge in the first six months.
  • The training, support and flexibility that can be provided.
  • Information on what other support is available for example, for trustees employed by the employer, time off work to perform trustee duties, maybe a statement from the HR director supporting this.

Reasonable adjustments

  • Explaining that reasonable adjustments can be made for candidates with disabilities or health conditions.

Career development

  • Benefits of joining the governing body – new skills, enhancing existing skills, working with employer management.

Communications style

The style of your communications is also important. When looking to recruit new trustees:

  • avoid language that could put-off potential recruits, such as ‘expertise’ or expecting a certain length of experience
  • ensure images and branding are inclusive – for example, photographs showing diverse people

See our example recruitment advert (DOC, 38KB, 2 pages) and example recruitment leaflet (DOC, 26kb, 7 pages).

As well as the content of your communications, think about the most inclusive and accessible form.

  • Consider how information can be better presented, rather than have lengthy descriptive content.
  • Offer the contact details of an existing trustee to answer questions from potential candidates.
  • Hold a webinar for interested candidates to ask questions, perhaps directly asking current trustees.
  • Use different communication channels. The more diverse, the more people you are likely to reach. You could use company communication channels, alumni apps, email, website, social media, using sponsor’s diversity networks, and innovative approaches like poster campaigns.

Case study – MNT communication

The trustees had an objective to increase the range of candidates for an MNT position to bring in fresh perspectives and fill certain diversity and skills gaps that had been identified. They produced an MNT communication which was specifically designed to achieve this goal using inclusive images and language and focusing on the types of candidates they were looking for. An online application form was produced which candidates could either email, print and post, or could have posted to them (including in braille format) to return, making the application process more accessible.

To broaden the reach of the communication, they also engaged with the employer’s diversity and inclusion networks for women and ethnic minorities, as well as for disabled, LGBTQ+ and parent and carer colleagues, and held online sessions for all eligible members.

16 applicants applied for this MNT position compared to two and six from the previous two processes.

Run a 'candidate day'

As part of the communications process, some governing bodies have found a candidate day or similar, shorter sessions can be useful for attracting candidates to the role. These sessions (perhaps held online or hybrid online/in person) can communicate the information referred to above. Sessions can:

  • reinforce your governing body’s commitment to EDI and the desire to attract a broader range of candidates
  • introduce potential candidates to existing trustees, who can discuss their own experiences of being on a governing body
  • outline a typical 'day in the life', which helps candidates understand the role better, but also gets them to imagine themselves performing it
  • explain the support (including training) that is available to trustees
  • show flexibility and explain your willingness to receive requests for reasonable adjustments for disability or health conditions
  • highlight the value of the role to the scheme and its membership
  • provide an opportunity for existing trustees to answer questions
  • ask them to complete the first module of the trustee toolkit to get a feel of the training

Case study – candidate day

An occupational pension scheme introduced a candidate day into the MND process with the aim of achieving greater diversity on the trustee board.

Shortlisted candidates were asked to attend a candidate day (the employer agreed they could have time away from their ‘day jobs’). The dates were advertised well in advance in the MND advert to maximise attendance. Those candidates who went forward after the candidate day would be selected as MNDs. But if there were more candidates than vacancies, they would go through to a selection panel process.

Candidates were offered a choice to attend in person or virtually. The day consisted of:

  • various sessions and talks on details of the MND role, benefits and challenges along with the EDI policy
  • details of support and training
  • questions and answers
  • practical examples from existing trustees
  • a chance for candidates to understand the role before applying

Remuneration

An increasing proportion of schemes pay at least one trustee, although this is more common among larger pension schemes.[2]  By paying trustees, the pool of potential candidates grows beyond those who can afford to give their time unpaid. When considering pay, you may wish to look at other elements of the role, the appointment process and current market rates. You could review the existing trustees pay to remove any historical discrepancies between different trustees.

Footnotes for this section

  • [1] Numerical scoring approaches often help guard against value judgements (the latter of which can more easily mask unconscious bias). Numerical evaluation is more likely to identify differences in panel scoring, prompting discussion as to why the same candidate was perceived differently. This is more likely to produce a robust and fair result.

  • [2] PensionChair Remuneration Report 2021 (PDF, 656kb, 25 pages)

Look outside the governing body: other ways to improve diversity of thought

It’s not going to be possible to have every view on every topic expressed and even if it were, that could make decision-making inefficient. However, you may identify areas which would benefit from the views of someone with specific experience or knowledge, for example, by using advisers or gathering views from members to input on specific issues. You may ask an adviser to join a meeting for a particular agenda item to contribute to the discussion and share their views and experience.

Master trusts are required to have a process in place to encourage scheme members, or their representatives, to make their views known on matters that affect them. An example would be to set up a member advisory panel recruited from a diverse a pool of members considering characteristics, location, pot size and member type (deferred, active) to enable trustees to gather views.

Selection or review of advisers and service providers

You will likely work closely with professional advisers and service providers, and they can also contribute to your EDI goals. In the case of sole trustees, the scheme advisers and service providers are another way to introduce diversity into decision-making. Think about diversity gaps on the governing body when drafting tenders and whether an adviser or provider can bring a different or missing perspective. Consider how they can promote inclusive discussions and decision-making. Include questions in tenders such as:

  • How does your organisation promote diversity of thought, perspective, challenge, and promote wide debate?
  • Give examples of how your organisation’s EDI policies promote good advice and support better decision-making for your clients.
  • How would your advice contribute to an atmosphere of inclusion on the governing body?
  • Explain how inclusion and diversity have been reflected in planning the team you have put forward to support the governing body.

Joining committees before the governing body

Where a scheme operates forums and committees that make recommendations to the governing body, you could recruit people to sit on these forums. While this might offer a limited view of the role, it does provide a great opportunity to increase diversity and inform prospective candidates, while allowing those who can’t commit to attending all meetings to join. You may need a confidentiality agreement and manage any conflicts of interest.

Allowing trustees to attend committee meetings as observers can also help to build their confidence, knowledge and understanding.

Additional resources

The following organisations and groups have more information about EDI initiatives in the pensions sector:

  • Women in Pensions is a network for women in the pensions industry whose membership includes trustees, asset management employees, consultants, journalists, lawyers and non-profit organisations.
  • The Diversity Project is a cross-company initiative championing a more inclusive culture within the pension’s profession.
  • NextGen Pensions is a network for young professionals aimed at promoting the next generation within the pensions industry.
  • Diversity in Pensions is a network with the aim of promoting diversity in senior decision-making roles within the pensions industry through holding events. 
  • O:pen is an initiative open to LGBTQ+ pensions professionals, their allies and anyone with an interest in diversity and inclusion in the pensions industry.