IAPF Spring 2018 Irish Pensions Magazine

24 | IRISH PENSIONS MAGAZINE | SPRING 2018 EXPERT OPINION ways of thinking or at least the diversity of approaches that a more age-diverse board would otherwise have. This is not to say that all decisions reached would be different, however, there may be instances when a broader perspective would be advantageous and improve decision-making. A common age profile of trustees can create an environment with the potential for groupthink to emerge. Being aware of these behavioural biases is a big step towards controlling them. Skills audits can be really useful to identify strengths and weaknesses and consider gaps when choosing new trustees. Using frameworks to consider multiple viewpoints and scenarios builds a more robust picture of the challenges we face. Trustees’ Approach to Investment Our research also focused on the attitude of trustees to investment matters. Importance Just over 50% of a full trustee board’s time is spent on investment matters and most trustees feel this is about right. Additionally, just under two- thirds of trustee boards have an investment sub-committee which, in over 75% of cases, meets quarterly • Trustees surveyed ranked highly on education and experience. • The average trustee has been a trustee for 10 years Trustees tend to have a university degree, moreover, 27 per cent have a Master’s Degree and 5 per cent have PhDs. They have an especially high concentration of financial qualifications. While this is strongly positive, behavioural science indicates that a diverse set of subject knowledge may be more valuable to a board. Why does all this matter? The lack of diversity in trustee boards creates two potential issues: • There is little diversity of opinion across gender as only one in five trustees are female. Several research studies 1 ) have shown that the presence of women on corporate boards is beneficial for monitoring and board process and that female board members have a greater impact where governance is weaker. Gender diversity on trustee boards is thus an important issue to consider going forward as it may improve board effectiveness. • There is a risk that trustee boards are not exposed to new