In winning 65 seats in the Durham County Council’s May local elections, Reform party leader Nigel Farage
warned government workers that “anybody who’s working on climate change initiatives or diversity, equity and inclusion (DEI)… I think you better be seeking [an] alternative careers very, very quickly”.
The statement is part of a wider campaign, both domestically and globally, to dismantle DEI initiatives which promote workplace equality and, in the UK at least, compliance with legal obligations under the Equality
Act 2010.
In the US following his return to office, President Trump warned that he would “terminate every diversity, equity and inclusion program across the entire federal government”, and has since gone on to sign a memorandum removing ‘radical’ DEI from the Foreign Service.
Making better decisions
Yet this anti-DEI backlash is seen as damaging from some quarters, with unions vowing to protect workers’ rights, while other organisations are keen to reinforce the benefits of diversity.
Sandisiwe Dhlamini, The Pensions Regulator’s equality, diversity and inclusion (EDI) lead, says that diversity on trustee boards is essential to ensure a broad range of members’ interests are represented.
“Diverse groups make better decisions where there is equality and inclusion. Following automatic enrolment, millions of people now save in workplace pensions, and as such it is important pension scheme governing bodies are able to make decisions in the best interests of savers. That is why we urge trustees to follow our EDI guidance and take action to ensure their scheme meets our expectations.”
Daniel Taylor, client director at pension administration firm Trafalgar House, takes a similar position arguing that “a board full of the same type of person, however well-intentioned, is more likely to miss something”.
“Pensions aren’t theoretical; they’re personal. They touch every kind of member, from every kind of background. If the people overseeing those benefits all share similar life experiences, there’s a risk the decisions they make won’t reflect the realities of the people they’re supposed to serve,” Taylor says.
A 2024 survey of 2,197 trustees demonstrated broad support for the importance of DEI on boards. More than eight out of 10 of those surveyed said that diverse and inclusive pension boards are important for good decision-making, good governance, and good member outcomes.
Taylor says: “You can point to plenty of research, but honestly, it’s obvious when you see it in action. Mixed boards are more probing. That’s not a theory; it’s what we see happening when a room includes different voices with different lived experiences.”
Diversity blind spots
However, the reality is that UK pension boards are far from diverse, at least in terms of gender, age race and sexuality. TPR’s research reveals 76 per cent of trustees are male, 91 per cent are aged over 45, 95 per cent are white, and 97 per cent identify as heterosexual.
The watchdog’s guidance encourages schemes to adopt EDI policies, assess board diversity regularly and consider fixed-term appointments to bring in fresh perspectives, but progress has been slow.
In the meantime, the lack of diversity on trustee boards risks leading to blind spots, which could serve to exacerbate pension inequality among scheme members.
Dhlamini says: “Diversity blind spots in scheme governance can occur when schemes lack awareness of the full range of characteristics and experiences that shape members’ needs and perspectives. For example, by not collecting or considering data on member and trustee diversity. Without this data, schemes may overlook gaps in representation or fail to recognise how a lack of diversity can affect decision-making and member outcomes.”
Taylor says he has witnessed the impact of a lack of diversity in pension trustee meetings.
“Speaking personally, as someone from the LGBTQ+ community, I’ve sat in meetings where discussions around members’ partners and families have been really uncomfortable. Sometimes even disrespectful.
It’s rarely malicious, but it still stings. Education helps. Inclusive language still hasn’t landed
across the industry—some boards treat pronouns or correct titles with confusion, or worse, amusement. All while believing they’re already inclusive.”
He adds: “And age is a big one. Senior voices in pensions tend to be older and follow similar paths. That creates blind spots. We need to open the doors more widely if we want real change.”
TPR is attempting to drive change by “embedding consideration of saver inequalities across our work, supported by an internal literature review of industry and academic research”.
The challenge for some schemes in ensuring diversity across trustees, says Emily Rowley, associate director at law firm Sackers, is their inability to influence who is appointed to the board.
However, she adds: “We see schemes looking over member-nominated director communications with a fresh pair of eyes to see if they could benefit from a change in tone, focusing more on skills than on experience. We also see schemes thinking outside the box and utilising member forums or shadow boards to obtain fresh perspectives.”
Political influence
Returning to the anti-DEI sentiment from politicians on both sides of the Atlantic, this seems not to have influenced the trajectory for the UK pension industry so far.
Alastair Meeks, client director at professional trustees Zedra, says: “To date, this [anti-DEI] agenda has yet to cross the Atlantic, though given Reform’s recent local elections success, we might see more of a pushback. The expectations of government and the requirements of the regulations in force are not going to lessen in these areas in the UK in the short or medium term.”
He continues: “Labour’s MPs are instinctively in tune with the principles underpinning both ESG and DEI, as are those of another 100 or so MPs for that matter.
“The Pensions Regulator is likely to take its lead from the tone struck by government and MPs when setting its expectations. Nor are the courts likely to upend expectations of trustees. So, I’m not anticipating a huge change in the short term.”
Joe Condy, investment consultant at Quantum Advisory, agrees and notes the strong consensus that diversity of thought among boards lead to better outcomes.
“While the broader political narrative may chop and change depending on who’s sat in the big seat, in the UK the commitment to support diverse, high-functioning and effective governance arrangements remain unchanged,” he says.
More than box-ticking
Enthusiasm for DEI, however, is not a substitute for demonstrable skills and experience; characteristics that are already evident on trustee boards in the UK.
The TPR states that while pension trustees are less diverse than the overall population, “most trustee boards were seen as diverse in terms of skills, life experience, professional background, cognitive diversity and education”.
This, according to Condy, is more important than “visible characteristics”.
“Simply ticking demographic boxes will not deliver the desired benefits. It is also worth noting that diverse groups can also face challenges, such as slower decision-making or communication hurdles.”
He concludes: “Ultimately, diversity must be underpinned by a shared commitment to collaboration, teamwork and understanding, which is important for governance structures and the boards of pension schemes.”
