05/22/2023 | News release | Distributed by Public on 05/22/2023 03:22
The Pensions Regulator publishes guidance to boost equality, diversity and inclusion across trustee boards
22 May 2023
In its action plan published in September 2022, TPR set out its definition of EDI
Equality |
TPR quotes the Equality and Human Rights Commission: "Equality is about ensuring that every individual has an equal opportunity to make the most of their lives and talents." |
Diversity |
Diversity means variety. TPR adopts the same definition as the Pension & Lifetime Savings Association, which encompasses the nine protected characteristics under the Equality Act 2010 (for example age, sex, race) but goes further to encompass a wider range of individual differences, for example socio-economic background. |
Inclusion | The effective involvement of individuals from all backgrounds, creating an environment in which they can thrive and reach their full potential. In an inclusive environment, diverse characteristics and identities are mutually beneficial to individuals and organisations enabling the best decisions to be made. |
Combining equality, |
Having people from different backgrounds might mean that a trustee board is more diverse, but if those people don't feel respected or heard then the trustee board will not benefit from their full talents and experiences. |
Ways to get started |
TPR recognises that each scheme will have different challenges in terms of achieving EDI.
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Reviewing diversity on the trustee board |
TPR sets out that to improve EDI there should be a regular assessment of the trustee board's diversity of characteristics, life experiences, expertise and skills. TPR provides an example skills matrix and sample board evaluation questions to help with this process. The process for recruiting new trustees is viewed as a key opportunity to work towards EDI aims. Succession planning is an important part of this. The guidance encourages thought about the use of fixed term trustee appointments and balancing the fresh perspectives that new trustees can bring with the risk of losing scheme-related knowledge. |
Encouraging an inclusive trustee board culture |
The guidance highlights the key role that the Chair plays in providing an open and inclusive culture. Key to this is encouraging full participation and creating an open environment where all trustees can voice their opinions. The guidance also notes the importance of feedback at the end of meetings, and adjustments to meetings/working styles to enable the board to be effective. |
Recruitment and selection of trustees |
The process for recruitment, nomination and selection of trustees can be a key area in working towards EDI aims. Nomination processes can be structured to attract a more diverse pool of candidates and actions can be taken to better communicate the role of a trustee and what it involves. Consideration should be given as to whether selection or election of Member Nominated Trustees is likely to work best for a scheme's EDI aims. Professional trustees may be a way to address diversity gaps. |
Employer guidance | The guidance sets out the important role played by the employer in ensuring that EDI is considered by their pension scheme. When selecting employer nominated trustees the employer should consider promoting the role as an opportunity to add value to personal/career development and ensuring staff have sufficient time and support to actually carry out the trustee role. Consideration should also be given to alignment of the scheme and organisation's EDI initiatives. The guidance notes that EDI considerations should form part of any decision-making around appointment of a professional trustee and in particular a move to a sole trustee. |
For further information, please get in touch with Robert Wallace or Sarah Keighley or speak to your usual XPS Pensions contact.