1 June 2022
A survey by LCP of DB schemes has highlighted very mixed views on Diversity, Equity & Inclusion (DEI) issues and their relevance to pension schemes.
20% of the 160 respondents said they saw DEI issues as an extra governance burden and are unlikely to act until they are formally required to do so. 43% are supportive but not yet acting, while 37% were supportive and have taken specific steps to address this area for their schemes.
The data forms part of LCP’s annual “Chart your own course” report which uses an industry survey and other analysis to explore the latest trends and ideas in DB pension scheme journey planning ,and will be published next month.
The top three barriers to taking more action on DEI issues were identified in the survey as:
Recruitment: A third of respondents said they had difficulties finding trustee candidates full stop, let alone diverse candidates. Another common frustration was the overall lack of diversity within the pensions industry and their particular sectors.
Engagement: Another third of respondents questioned the benefits of DEI, and many cited a wider lack of understanding of those benefits in the industry, as well as a lack of appetite to take these issues forward.
Resource: A fifth of respondents struggle to prioritise DEI against the growing list of challenges faced by trustee boards.
LCP cover some tips to overcome these barriers in their upcoming report, and have also recently produced a guide to help trustees navigate DEI issues and highlight the benefits of an inclusive decision-making environment. The guide highlights a range of initiatives to improve governance and decision-making, from organising meetings that are easily accessible, to using alternative recruitment methods to reach communities currently under-represented on the board.
Jill Ampleford, Partner at LCP commented: “It’s clear we’re still a long way from industry consensus on what action, if any, to take in response to DEI issues. The merits of strong DEI practices are well researched and understood but are just one of many pulls on trustee time at the moment, and we sympathise that it can be hard to know where to start. We hope that some of the quick wins we suggest in our guide are a helpful starting point for trustees and look forward to seeing further progress in the pensions industry in the coming years.”
Notes to editors
The Chart Your Own Couse analysis is based on a market survey from April 2022 and data from LCP Sonar: a risk profiling tool that benchmarks pension schemes covering a range of risks that could throw a scheme off course (including covenant, investment, funding and governance risks). The latest LCP Sonar data is taken at 31 March 2022.