Creating diverse decision makers

We have set bold new ambitions to drive down inequality among savers and to create a fairer and more inclusive culture across the pensions industry. Our equality, diversity and inclusion (EDI) strategy is a roadmap for change. We pledged to work with others across government and the industry to embed diversity and inclusion (D&I) across pensions so that all savers are protected now and in the future.

Automatic enrolment has led to an explosion in the number of people saving. Every one of the 10.6m savers now enrolled deserves to be in a well-run scheme where decisions made on their behalf take into account their unique and varied circumstances.

Different groups of penion savers face distinct challenges in meeting their needs today and making provision for tomorrow.

As set out in our corporate strategy, we want savers to get value for their money and to ensure decisions made on their behalf stand up to scrutiny. Improving diversity across the industry is fundamental to these goals.

Better decision-making

It is clear to us that diverse groups make better decisions. Diversity among decision makers isn’t simply a desirable add on, it’s essential to ensure all savers get the retirement they are planning for.

Trustee boards which are not diverse risk knowledge gaps, entrenched ideas, biased thinking and poor decision making which puts savers at a disadvantage.

Well-run schemes are those that have access to a wide range of perspectives, knowledge and skills, where everyone has equal opportunity to contribute and challenge from different perspectives.

We want to see all schemes, large and small, truly embrace the value of diversity and take strident steps to bring about change which will then help to lead to better governance.

Working together

Building diverse boards means all of us pulling in the same direction, sharing information and working collaboratively. To this end, we set up an Industry Working Group to tackle the barriers to D&I.

Regular meetings began last year, and we’ll be publishing an action plan in the coming months. We want to be thorough and ensure all volunteers have the opportunity to share their perspectives and expertise.

When we first called on industry to join the group we were delighted more than 60 representatives from across the sector wanted to be involved. It’s testament to a tide turning in favour of real change that so many people wanted to give their time and energy to improving decision-making on behalf of savers by making pensions a more level playing field for all.

Our volunteers are producing some materials and insights that will help support the recruitment and appointment of more diverse trustees and also provide a baseline to measure how we are making progress. We all want to make a sustained difference; this is not a short-term initiative so it will take time to embed.

The working group now has four work-streams which will look at:

• The role data can play in bringing D&I to governing bodies;
• Developing best practice in the composition of boards;
• Developing practical tools to share best practice on recruiting trustees;
• Delivering engagement with employers to help broaden the appeal of trusteeship.

Over the coming months we will be sharing data, research and approaches with other regulators on how we can make a difference. There is a huge amount to do, but we must make significant change to make our industry more diverse and inclusive and where equality is a right not a privilege.

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