Trustee boards lacking diversity

New research from Aon Hewitt and Leeds University Business School (LUBS) on pension fund trustees has found high levels of financial literacy but a lack of diversity.

According to their research, over 80% of trustees are male, with an average age of 54 and at least 10 years of trustee experience on average. LUBS associate professor, Dr Iain Clacher, commented: “Studies have found that gender diversity on corporate boards helps strengthen governance and is beneficial for monitoring and the board decision-making process. The current profile of trustees may also create an environment where ‘groupthink’ could emerge.”

Their joint report, Mapping the Trustee Landscape, looks at various aspects of trustee governance and other issues which can impact on trustees’ investment decision-making. It was based on responses from almost 200 mainly defined benefit pension funds in the UK. Aon Hewitt senior partner, John Belgrove, commented: “We believe that understanding trustee decision-making is essential in improving non-regulatory scrutiny on the asset management sector. We are, therefore, delighted to continue supporting new research into behavioural finance and the trustee context. The LUBS research builds on the work we did last year to create the Aon Trustee Checklist which helps trustees to check and militate against behavioural biases.”

Aon Hewitt and LUBS said that the research project is ongoing and they will publish more findings during 2017.