TPR urges chairs to improve board diversity
March 30, 2023
The Latest guidance by the UK pensions watchdog has urged chairs to play a key role in making boards more diverse and inclusive.
The Pensions Regulator (TPR) has published guidance for pension scheme governing bodies and employers on equality, diversity, and inclusion (EDI), which highlighted the importance of chairs.
The guidance encouraged chairs to drive and promote diversity in governing bodies and lead progress toward meeting EDI objectives.
According to TPR, chairs also play an important role during the recruitment stage and should ensure the pool of candidates is widened to include those outside of senior management positions.
This is likely to enhance diversity and allow the consideration of employees with skills and experience that could further EDI goals, according to TPR.
Chairs should also make sure there is a succession plan in place, which is regularly updated to reflect the importance of EDI and continue the legacy.
The guidance stated: “It is the chair who sets the tone for discussions surrounding inclusivity, embedding it in the culture of the governing body and ensuring that any EDI policies are followed.”
The guidance also highlighted the importance of developing and maintaining an EDI policy, to ensure employees understand the behaviour expected of them.
According to TPR, policies should cover an agreed definition of EDI, the EDI aims and an EDI training plan for the governing body.
TPR recommends all scheme employers provide EDI training, which can be accessed by the governing body, to emphasise the role of EDI in board effectiveness and decision-making.
Employers should also ensure any performance assessment includes how effectively EDI has been embedded into their process.
Louise Davey, director of regulatory policy, analysis, and advice at TPR, said: “Employers also have an important role in ensuring EDI is considered by their scheme. And they have a duty to support employees who are nominated to their scheme’s governing body.”
Improving diversity remains an issue for regulators elsewhere in the world.
In March, several former chairwomen of the SEC urged the US regulator to do more to improve diversity within the US financial services industry.
Last Updated: 30 March 2023