Diversity and inclusion
Diversity and inclusion often go hand in hand but are different from one another. This means that organisations need to consider both, in their people management practices and strategies. Diversity is about recognising difference. It’s acknowledging the benefit of having a range of perspectives in decision-making and the workforce being representative of the organisation’s customers, or it’s membership.
Inclusion is where people’s differences are valued and used to enable everyone to thrive at work. An inclusive working environment is one in which everyone feels that they belong without having to conform, that their contribution matters and they are able to perform to their full potential, no matter their background, identity or circumstances. An inclusive workplace has fair policies and practices in place and enables a diverse range of people to work together effectively.
How this relates to occupational pension schemes
What makes a good Trustee of a pension scheme? You might think of characteristics such as fairness, independence, integrity, familiarity with the trust documentation and relevant law, investment expertise and the ability to solve problems, work towards goals, communicate and work with others.
A good Trustee will likely possess some or all of these characteristics, but one of the key legal duties in Trustee decision-making is the ability to take account of relevant factors and disregard irrelevant factors so as not to reach a perverse or irrational conclusion. In 2019, the Pensions Regulator commented for the first time on the correlation between Diversity & Inclusion, good governance and the proper performance of a Trustee Board’s legal duties.
"Our view is that pension boards benefit from having access to a range of diverse skills, points of view and expertise as it helps to mitigate against the risk of significant knowledge gaps or the Board becoming over-reliant on a particular Trustee or Advisor. It also supports robust discussion and effective decision making".
– The Pensions Regulator, Industry Consultation: Future of Trusteeship and Governance, July 2019.
Concert are all to aware of the challenges that this can bring to trustee boards and are currently helping several of our clients with Diversity and inclusion strategies. If you would like help in this area then please contact your Client Manager or email firstname.lastname@example.org.