Number of trustee boards taking steps towards diversity dips

Almost two-fifths (38 per cent) of trustees say their trustee boards have taken steps to increase diversity in the past 12 months, according to Barnett Waddingham (BW) and Winmark.

The firms' Pension Chair Remuneration Report showed that this was a slight decline from the 40 per cent who had said the same thing last year, although more than three-quarters (77 per cent) of trustees stated that trusteeship was not diverse enough.

Almost two-thirds (61 per cent) of trustees still thought trusteeship was not diverse enough in terms of ethnicity, 57 per cent thought it was not diverse enough in terms of age and 47 per cent said the gender imbalance needed to be addressed.

Participating schemes reported that females made up only 24 per cent of their trustee boards, while black and minority ethnic trustees made up just 3 per cent of boards.

Just under half (45 per cent) of respondents agreed that effectiveness of the trustee board would be improved if it was more diverse.

Barriers to increasing diversity were also listed, with 80 per cent citing a recruitment-related barrier and a third (33 per cent) stating that the profile of scheme membership was the most common barrier, while other issues included low turnover in trustees (9 per cent) as well as a lack of candidates who were interested (12 per cent).

BW partner, Sonia Kataora, said; “Although trustee boards have limited diversity across age, gender and ethnicity, the majority of trustee chairs are not unaware. Nearly all specific steps schemes have taken to increase diversity seek to address the primary challenge of recruitment and many are already implementing methods in order to increase representation across all demographics.

“It is also recognised that diversity in the board room should also encompass experience, skills, backgrounds and perspectives. All of these, including demographics, will contribute to the quality and value of boardroom discussions and debate.

“In order to increase the diversity of applicants, trustee chairs need to review their application process to gain greater interest and engagement from a wider talent pool.”

Along with examining the issue of diversity, the report found that median trustee remuneration had fallen from £47,350 last year to £47,000.

The number of trustees expecting a remuneration increase in the next 12 months had risen to 41 per cent, while 56 per cent expected it to remain the same and just 3 per cent expected a decrease.

Winmark research director, John Madden, said; “There is a growing feeling amongst pension chairs that their remuneration is not keeping pace with the challenges they face. One in six now say they don’t have enough time to adequately fulfil the demands of the role, up from just one in twenty in 2019.

“If a hoped for rebound in remuneration levels occurs this year, it will be interesting to see if this perception persists.”

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