Professional trustee (PT) firms generally appear more diverse than typical pension trustee boards, research commissioned by Cardano has found, suggesting that PT firms are playing a “critical catalysing role” in improving diversity, equality, and inclusion (DEI).

The analysis found that, on the whole, trustee boards remain "overwhelmingly male" and over the age of 45, as 75 per cent of respondents sit on boards where over 60 per cent of members are male, while two out of five sit on boards where half the board are 46-60 years old.

In addition to this, nearly three quarters (70 per cent) said that four out of every five board members have tertiary education.

In contrast to traditional pension scheme boards, however, the research found that PT firms appear generally more diverse, particularly in terms of age and gender.

Indeed, over a third (36 per cent) stated that more than 40 per cent of their trustees are female, while a quarter of schemes with professional trustees said the same.

PT firms were also found to have better age diversity than scheme boards, with one in five reporting that over 40 per cent of board members are below the age of 45.

In addition to this, the research found that more than half of PT firms (54 per cent) have conducted or are planning to arrange diversity and inclusion training as part of their efforts to improve DEI, while 38 per cent have established a formal zero-tolerance policy for harassment or bullying.

However, there are still challenges to overcome, particularly around collecting DEI data or benchmarking, as the research found that more than two thirds (68 per cent) of respondents do not follow any major DEI standards.

Furthermore, despite 63 per cent recognising that DEI is a useful way to broaden a team’s skill sets as well as improve governance and decision-making for better member outcomes, 58 per cent of respondents thought that DEI was low priority compared to other governance issues.

Just over two fifths (42 per cent) suggested that DEI had taken a lower priority due to the failure of attracting diverse talent, while 30 per cent attributed this to the risk of virtue signalling or DEI becoming a box-ticking exercise.

Commenting on the findings, Cardano Advisory CEO, Darren Redmayne, stated: “Professional trustee firms are playing a valuable role in helping the industry progress on DEI issues.

"As The Pensions Regulator works through its DEI action plan this year, we believe trustees are a key stakeholder group for the industry to partner with to further improve DEI on pension scheme boards.

“Positively, our research also shows that there is a willingness to embrace DEI with a confident belief that improving DEI is beneficial not just for trustees, but important for delivering better outcomes for pension savers too through more robust decision-making accessing wider perspectives.”

Cardano head of trustee engagement, Gillie Tomlinson, also emphasised the need for firms and schemes to continue to attract diverse talent to develop best practice DEI policies from the ground up, and prevent lack of representation from being a barrier to change.

"The industry must work together and challenge how we can improve the attractiveness for people from diverse backgrounds to become both professional and lay pension trustees," she stated.

Adding to this, Now Pensions chair of the board of trustees, Joanne Segars, noted that whilst progress has been made, there is still further to go, stating: “The pension industry is in a very different place to where it was when I first joined 30 years ago.

"The industry has seen an increasing number of women entering the profession, which is fantastic, but we still have some way to go regarding gender, age, ethnicity and socio-economic background.

"I hope by being one of the (still too few) female chairs in our sector, I can continue to challenge the status quo and inspire more women to become trustees. More diverse boards lead to better governance and, in turn, better outcomes for members.

"Adopting clear policies and monitoring will help achieve better diversity. We all have an important role to play in driving the discussion - and action - on the ways in which we can overcome the challenges and barriers to greater diversity in pensions.”

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