DE&I implementation challenges: bridging the gap

Diversity, equity and inclusion (DE&I) have become crucial components of effective pension scheme governance. However, recent research by Barnett Waddingham reveals a paradox: while trustees express high confidence in their DE&I knowledge, many struggle to translate this understanding into concrete action. 

The confidence conundrum

Our recent survey of 65 pension board trustees revealed some interesting statistics:

"83% of trustees feel confident that they possess all the necessary knowledge about trusteeship, expressing no need for further training."

The implementation gap

Despite this apparent assurance, a significant disconnect emerges when it comes to putting DE&I principles into practice:

• 11% are still developing a DE&I strategy.
• 3% plan to create a strategy but haven't started.
• 2% have no strategy or plans to create one.

The widespread lack of DE&I integration raises concerns about the effectiveness of the DE&I practices among the 85% of schemes that claim to have such strategies in place.
 

Barriers to progress

What's holding trustees back from effective DE&I implementation? Our research points to several key factors:

Competing priorities: Trustees are juggling multiple strategic objectives, including:

• Strategy setting including end game planning (43%).
• Adviser reviews and/or replacements (38%).
• Adapting to TPR's new General Code including Effective System of Governance (ESoG) & Own Risk Assessments (ORA) (34%).
   

Bridging the gap: practical steps forward

To address these challenges and move from knowledge to action, trustees should consider the following approaches:

Embed DE&I in governance processes

Actively integrate DE&I considerations into trustee hiring, nomination, succession planning, and decision-making.

Facilitate structured discussions

Create dedicated time for trustees to translate their DE&I understanding into actionable plans.

Seek expert support

77% of trustees are turning to external advisers for guidance, such as the Pension and Executive Management Services team at Barnett Waddingham. Don't hesitate to leverage this expertise to navigate complex DE&I implementation challenges.

Prioritise continuous learning

While confidence is high, the rapidly evolving DE&I landscape demands ongoing education and adaptation.
 

The path to inclusive governance

"Trustees must not only verbally commit to DE&I strategies, but also actively integrate these principles into their governance practices to foster truly inclusive and equitable pension schemes."

By taking concrete steps to bridge the implementation gap, trustees can ensure their DE&I strategies translate into meaningful action, ultimately benefiting scheme members and fostering a more inclusive pension industry.

Remember, effective DE&I integration is not just about ticking boxes — it's about creating a culture of inclusivity that permeates all aspects of scheme governance. As you navigate these challenges, don't hesitate to seek support from experienced advisers such as the Pension and Executive Management Services team at Barnett Waddingham who can provide tailored guidance on your DE&I journey.