So, across the pensions industry, trustee boards are thinking about how to increase their diversity (it’s not always easy to do) and become more representative of their membership. But are they also thinking about how becoming more diverse might need to change the way they make decisions?
The whole point of increasing diversity is to allow trustee boards to better take account of different perspectives in the way they manage their scheme. The decisions made should be better for it, but what might it mean for the decision-making process?
1. Decisions might take longer
A truly diverse and inclusive discussion can take time.
We might need to allow more time for key decisions when putting together meeting agendas. We might also need to be more flexible to rejig agendas on the day. Some decisions might need more than one discussion. We might need to think more strategically about which decisions are made at board level, and which are delegated, so trustee board time is spent on what matters most and key decisions aren't being rushed.
2. Some decisions may not be unanimous
When people have different perspectives, and are actively encouraged to express them, they are unlikely to agree on everything.
In most cases, trustee discussions will still ultimately lead to consensus, but they might not always. We might need to be more familiar with (and more comfortable using) any powers for non-unanimous decision making. As these powers might vary from scheme to scheme and from decision to decision, schemes may need legal advice on their options.
3. We might have to think more about how we document decisions
If minuting trustee meetings is an art form, minuting a robust and diverse discussion where a wide range of different views are expressed and weighed up is undoubtedly fine art.
We might need to take extra care over the drafting and review of minutes and be ready for attendees to have more comments than they might have had previously.
4. We might need to be more prepared
Discussions are usually most productive when people have had sufficient time to prepare and reflect and when people aren’t caught off guard.
We might need to get papers out earlier to give people more time to formulate their views. We might need to think more about how papers are positioned, so it is clear how different perspectives have been considered, particularly where a recommendation is being made. For some decisions, it might be helpful to seek initial views in advance of the meeting to flush out whether the matter is likely to warrant extra time or needs more exploration before it is discussed at board level.
5. We might need to get more comfortable with being uncomfortable
Many people find disharmony of any kind uncomfortable and can take being challenged personally. Many just prefer it when everyone is on the same page.
We might have to embrace the discomfort whilst we get used to new ways of working. We might need to do more team building to ensure that each board member understands what everyone brings to the table. Trustee chairs will inevitably play a key role in promoting inclusion and bringing more diverse boards together.
Ultimately increased trustee board diversity and more inclusive discussion and decision making should be an absolute game changer for the pensions industry and, more importantly, for pension scheme members.
But for that to happen, we might all need to be up for changing the way we play the pensions game.
All in favour say “aye”?
Naomi Brown – Senior Counsel, Sackers
