Trustee Board ED&I – right answer, wrong question

26th May, 2023

  • If we really want the benefits of equality, diversity and inclusion (ED&I) to lead to better outcomes for members then we should be focusing hard on the advisers and their approach to ED&I as well as simply the trustee board.

    We all understand the benefits of ED&I and how embedding ED&I into the Trustee decision-making process leads to better outcomes for members.  The Pensions Regulator has been very clear on this and has provided        guidance on how Trustee boards can incorporate ED&I.

    You can read about some of the features of the guidance from my colleague Paul Tinslay in his recent blog:            ESoG/EDI – more governance policies before the Code is even published.

    In my own case, I sit on various different trustee boards.  Some are more diverse than others.  However, it is not completely clear to me that the more diverse boards are actually making better decisions because of the broader set of experiences and views they represent.  Instead, for all the trustee boards I work with, the advisers are the key drivers of the decisions made by the trustees.  Nine times out of ten, or maybe ninety nine time out of a hundred, the trustee board will follow the advice they receive.  Therefore the ED&I that’s embedded in the preparation and delivery of the advice will have just as much, if not more, impact on the final decisions the trustee board makes.

    By way of a stereotypical example, a senior partner in a law firm preparing technical legal advice in the same way as he or she has always done, and then presenting that advice in the same way and the same style as always will lead to the trustees making the same decision as they have always done.  Whether the trustees are diverse or not. 

    A personal gripe of mine is why do advisers feel the urge to use Latin so much?!  They are either showing off or seeking to exclude half of those they are presenting to.  Neither is a good reason to use Latin. The same is true of acronyms which exclude those who are not already familiar with pension speak and are off putting to potential trustees as well as confusing to members. Don’t forget the I!

    I would like to see advisers and other pension scheme service suppliers put ED&I at the centre of their processes.  Each should have an ED&I policy for the delivery of advice and other services to the trustees to support better decision making.  Whilst many advisers will claim they have an ED&I policy, I have never seen one or been told that it has been used as part of the process for preparing advice. 

    I would like ED&I policies to state the adviser’s approach and make it clear how the policy has been applied when drafting the specific advice.  Importantly, the presentation of advice should have ED&I at its core so that all trustees find it easier to understand and interpret the advice.  In this way, trustees will be able to judge for themselves the influence of ED&I on the advice they have received. 

    Advisers having ED&I policies and applying them to the advice they provide will make it easier for trustees to make better decisions for their members.  And hopefully we can avoid the use of Latin.

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    • Published byVassos Vassou

      Vassos is a Director of Dalriada Trustees and an Accredited Professional Trustee based in our London office. Vassos works with Dalriada.Together schemes in a trustee capacity alongside his Dalriada.Together colleagues to support the running of those schemes.  Vassos also has a wider...

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