Master trusts are required to have a balance of skills and experience on their trustee boards, providing cognitive diversity in their decision-making.
But this diversity can only be truly achieved if there is also some balance of men and women on these boards. Of 52 trustees across nine leading master trusts, just 19, or 37%, are women.
Of course, diversity does not extend only to gender representation. True diversity also encompasses age, disability, and ethnicity, among myriad other characteristics – and having a mix of all these characteristics on a master trust board will aid a better understanding of the long-term needs of members.
For example, having more women on the board will enable better understanding of the gap in salaries between the genders, and the resultant gap in pensions, a well-documented issue.
But schemes can go further. Having more trustees with disabilities, or from a mix of ethnic backgrounds, would enable greater cognizance of the range of socio-economic circumstances faced by members – and, importantly, how to begin tackling their effect on pension saving.
One way this can be achieved is by going out to the members themselves when looking for new trustees, encouraging a higher degree of member representation – and this can have the added bonus of bringing in people without a specific pensions background.
Within the next couple of months, The Pensions Regulator is expected to publish a consultation on scheme governance and trusteeship, including a question as to whether master trusts, and indeed other schemes, should meet quotas relating to gender diversity.
Quotas may not be the way forward – and it may be impossible for all master trusts to have trustees representing every single member of their scheme.
But, while conscious of the fact I am a white man with no disabilities, I do believe it is important that schemes, master trusts in particular, do more thinking on the mix of their trustees.
It may be some time before master trust boards can fully represent their diverse member cohorts, but now is the time to consider the best way to do so.
James Phillips is news editor at Professional Pensions