Trustee diversity | Feature


“This is true of investment and anything else,” she adds. Bhudia, who has worked in firms that have seen diversity as key to investment perfor- mance, rather than a mission to be accom- plished, agreed. “If you don’t have five different points of view, there are at least four things you miss,” she says. “Why would you not want the broadest possible neural network work- ing together on an investment decision?” For Roger Cooper, head of trusteeship at Pi Partners, finding a broad mix is essential for a pension fund board.


“It is important to talk about diversity on a trustee board,” Cooper says. “Diversity of skills gives balance to a team, which is important when dealing with investment and governance, with challenge being a key component for effective investment decision making.”


Eelens relishes this opportunity to challenge.


“I consciously try to disagree when there is immediate broad agreement as it scares me,” she says. “I have been in meetings where we spend four hours working on one thing, then agree to the next thing immedi- ately and I will challenge it in almost every instance.” For her, this challenge comes from the need to look from a different point of view, “playing devil’s advocate, not just being a 38-year-old woman”.


“There is a countervailing power that comes with diversity,” Eelens says. For her, a significant risk arises as most people are in the mainstream, so it is diffi- cult for them to think outside the box. “Because I’ve been divorced, it is important to me to ask a question about how a deci- sion we make will impact divorced people,” she says. “Because I’m not from the Neth- erlands, I ask about what our decisions might mean to others like me. Most people on the board do not have those qualities.”


A VERY PARTICULAR SET OF SKILLS For Cooper, who has been in the pensions sector for more than 35 years, it is clear


there is more to diversity once you lift the lid.


“Diversity is not just about general appear- ance; it is about the skills,” Cooper says. “In any team you need a diverse range of skills. Boards need to be more diverse, but the focus has to be on skill-sets rather than this being a box-ticking exercise to achieve diversity in terms of age, beliefs and gender.” Cooper, who has been the chair of trustees for several large UK companies, says that boards should carry out regular self-assess- ments of skills. It allows them to see where there are gaps in knowledge, experience and capability.


“Unlike the board of a business, a trustee board may have less control as to the com-


bers should be part of the trustee team,” Cooper says.


Diversity of age is something the pension industry has not yet had to grapple with, but it is going to be vital if boards are going to get new members comfortable about sav- ing for their retirement. “If we can get the education of what the trustee does to the workforce right, there should be more people engaged, meaning they are more representative of the mem- bership and the intention becomes self-ful- filling,” Cooper says. “This means we end up with a more diverse and effective board.”


NEW AGE INVESTMENT For Bhudia at the PPF, understanding the world from many different points of view,


If you don’t have five different points of


view, there are at least four things you miss. Purna Bhudia, Pension Protection Fund


position of their board so, for example, the nomination and selection process for mem- ber nominated trustees should aim to iden- tify candidates that are best suited to the role of a trustee,” he says. This is not an easy task. Today’s trustee must get to grips with the complexities of new asset classes, while having the confi- dence to set key performance indicators for investment


consultants and ask them


tough questions – and the pool of available and willing candidates in defined benefit (DB) schemes is shrinking.


The next challenge is creating a board that can effectively manage the trials and tribu- lations associated with defined contribu- tion (DC), something which is going to be key to engaging colleagues with saving and planning for their future – and setting an investment strategy to get there. “For DC, the members bear the risks asso- ciated with their retirement savings so gaining access to the perspective of the membership suggests that younger mem-


including age, also helps investors keep up with latest trends.


“The world is changing so fast,” she says. “Investment is not just about numbers. It is about how people are behaving and poli- tics and different points of view. One per- son cannot see the world from all these dif- ferent points of view and even if you invest in one asset class, in one currency, it will be moved by global impacts.” Humility is a key aspect for an investor who has more than their own assets to consider, she adds. “Managers need to be humble and realise that we do not have all the answers,” Bhu- dia says. “We need to recognise that there are gaps and build out a team that fills them with a diverse range of people with differing views and thought processes.” Eelens goes one step further: “I actually like it when someone can change my mind with a convincing rationale and argument that made me think differently about some- thing. Everyone should be open to it.”


Issue 85 | June–July 2019 | portfolio institutional | 41


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44