For many, Friday 8 March is just another day: the end of a working week. Yet behind its plain exterior it holds more meaning as it’s not only the final day of the Pensions and Lifetime Savings (PLSA) Investment Conference, but also International Women’s Day.
This year the PLSA will be marking International Women’s Day with a number of gender-themed – as well as broader diversity-themed – sessions and activities at its conference in Edinburgh.
One such example will see conference attendees explore current progress on cultural change in the UK investment market. This is a key issue given that a lack of diversity – gender, age, ethnicity and thought, among other areas – was partially to blame for the financial crisis of 2008. The need for the pensions and investment sectors to get to grips with diversity has a number of different angles.
For instance, it’s a well-established fact that investee companies with diverse boards make better decisions and are less prone to group-think. But the same can be said of pension schemes. Auto-enrolment has brought in a new wave of younger savers and the industry is beginning to focus on undersaving segments of the population, including women. It is therefore extremely important that schemes are better able to reflect and respond to savers’ concerns and having a diverse representation of backgrounds and experience throughout the pensions sector is imperative to achieve that. Last year, in recognition of the need for a diverse pension sector, the PLSA signed up to HM Treasury’s Women in Finance Charter, as part of its commitment to improving gender diversity within the industry.
At the time the PLSA was proud to have already achieved its Charter goal of having 50% women in its senior management team. We also set ourselves additional ‘equality’ targets for the PLSA board and policy board. At present, 58.8% of the policy board and 37.5% of the PLSA board are women.
We are aware that the industry needs to modernise. PLSA research from the Breaking the Mirror Image report showed that 83% of pension trustee boards are male. Furthermore, the average age of a pension trustee is 54 and just 3% are under 40. At a time when the pensions industry is undergoing a period of rapid policy, regulatory and technological change, it’s vital that those making the decisions take a flexible approach which benefits from incorporating different perspectives.
Marking International Women’s Day is just one way of promoting the diversity issues that still exist in the pensions and investment industry. It’s our hope that by raising awareness, decision-makers will take note of the benefits a diverse board and workforce bring to the companies they invest in and their own approach.
There’s a lot of good work going on to challenge and change the status quo, but as an industry there is more we can do. Pension schemes have been at the forefront of encouraging their asset managers and advisers to think about and work on what they are doing to encourage fresh, diverse thinking. We need to continue to apply this energy and attitude to the behaviour and make-up of own industry too.
Caroline Escott is the PLSA’s policy lead for investment and stewardship.