Lewis Brown: The last thing any of us wants is to deliver trustee boards with better credentials while severing the link to the members we serve in having done so.
The latest of the Association of Member-Nominated Trustees’ (AMNT’s) columns argues it would be a ‘hollow victory’ if a pursuit of technical excellence inadvertently sidelined member voices.
As I spent my weekend once again reading through the Department for Work and Pensions (DWP) consultation on trustees and governance, it struck me that there has probably never been a time where the requirements of the trustees' role have been more complex, the time demands so high and the impacts from the choices we make so impactful.
The reality for trustee boards today is very different to that I encountered as a new trustee fifteen years ago.
Trustees are now expected to implement and oversee increasingly diversified investment strategies; juggle ESG considerations; be well versed in carbon literacy; au fait with the rapidly evolving threat of cyber risk and all with half an eye on whatever new regulatory requirements wend their way up from Brighton in any given quarter!
With all that in mind, I don't think any of us would be anxious to take on the task of working out how to best ensure trustee capability to face these present and emerging challenges.
Questions and comments on skills, standards and accreditation litter the consultation, the focus swinging from professional trustees to lay.
The allure of accreditation is easy to see, a formalised baseline that offers reassurance to regulators and consistency in delivery (one would hope!). Yet, the area of accreditation has always been a thorny one for some.
Could these higher entry thresholds dissuade prospective lay trustees from walking our path? How easily can those additional time demands and inevitable costs be met by these individuals whose voices are so valuable?
It's easy to see how an overly forceful approach to accreditation being the only route to raising trustee professionalisation unintentionally excluding lay members, thus weakening board governance and diversity rather than strengthening it.
Member-nominated trustees exist for a reason. They bring a lived experience of scheme membership, a direct understanding of member concerns and a perspective shaped by the workplace culture of the schemes' members. Their contribution to effective governance cannot be overestimated, offering constructive challenge and diversity of thought instead of a just a technical credential.
But we shouldn't take these worries to mean that lay or member nominated trustees disagree with the concept of higher standards. The vast majority clearly take their responsibilities very seriously, investing significant personal time in developing and maintaining their knowledge.
The industry baseline competence is well supported by The Pensions Regulator's trustee toolkit, ongoing scheme-specific training and engagement in peer networks such as the AMNT or the Association of Professional Pension Trustees (APPT).
The problem really is that the exciting reality I alluded to earlier demands even greater knowledge and, the ability to think and act in a more agile way so we can navigate these ever-changing challenges.
Formal accreditation could be part of the answer, but it needs to be discussed and designed with care.
A rigid, one-size-fits-all qualification would risk excluding capable trustees who lack the time, financial resources or even confidence to pursue formal credentials. It could particularly impact on those already balancing trusteeship alongside full-time employment or caring responsibilities. That would have a disproportionate impact on MNTs and undermine industry efforts to improve diversity and representation on trustee boards.
As always with pensions, it feels as if the answer lies in a combination of prudence and a focus on outcomes.
Taking that higher level view, perhaps it doesn't matter whether every single trustee has the same level of certification, but rather that the board as a whole has the skills, knowledge and experience required to operate effectively.
Perhaps even recent innovations such as TPR's Effective System of Governance (ESOG) could evolve to better cover skills matrices and targeted trustee training plans, moving trustees into a world of living development rather than gearing up to pass a one-off exam.
The DWP consultation challenges the industry to consider what kind of trustee system it wants for the future.
One outcome must be beyond question: the continued presence of the member's voice at the decision-making table.
Direct representation is the bedrock for member engagement and confidence. It would be a hollow victory if a pursuit of technical excellence inadvertently sidelines those voices. The last thing any of us wants is to deliver trustee boards with better credentials while severing the link to the members we serve in having done so.
Lewis Brown is a member-nominated trustee (MNT) and a committee member at The Association of Member-Nominated Trustees (AMNT)
