Article · 8 minute read
By Sarah Gledhill & Jenny Gibbons – 3rd September 2024
WTW, our strategic global partner, recently completed an interesting project using the Work Roles team effectiveness package with a pension trustee board. In this article, Employee Experience Director Sarah Gledhill and Head of Pensions Governance Jenny Gibbons share the importance of diversity on a trustee board, critical criteria for selecting the right psychometric solution, and insights from using Work Roles for a pension board effectiveness workshop.
A pension scheme trustee board holds responsibility for delivering a wide range of different tasks – a much wider range in fact than many other board or corporate roles. Being effective and successful as a trustee board therefore requires a range of skills and experiences, a range of demographic backgrounds to represent a range of member perspectives, and a range of different behavioral tendencies or ways of working.
These are our three lenses of diversity: skills, demographic and cognitive – each of which are critically important when it comes to the job of being a pension scheme trustee. But what might it mean if a subset of these characteristics are over- or under-represented in your own trustee board? We’ll focus on the lens of cognitive diversity, using the Saville Wave ‘Work Roles’ model to explore what gaps, abundances or ‘blind spots’ might mean when it comes to the typical activity of a trustee board.
In our view, you can only properly and reliably understand behavioral tendencies and preferences via a psychometric model – individual judgment and industry or role stereotypes can be too blunt, inaccurate or frankly inflammatory. But there is an important point around choosing the right psychometric model – for us, that’s one that is highly predictive of behaviors, focuses on behaviors in a professional (not social) setting, and is sufficiently nuanced and granular to permit practical and targeted insights. Saville Work Roles delivers in each of these three areas.
Under our preferred approach, trustees (together with, if helpful, their executive and advisory teams), complete a short psychometric questionnaire, which then generates individual reports for the individuals themselves to digest, and allows us to compile a ‘group profile’ of most and least preferred behavioral preferences.
It’s critical to say that there is no ‘good’ or ‘bad’ Work Role – each of the roles contributes to a team in an important and different way, and all play a part in success. Similarly, the assessment is a measure of preference rather than capability – it does not tell us if an individual is or isn’t capable of certain behaviors, but it may indicate which behaviors take the most or the least energy for them, depending on how they naturally prefer to work.
The results of the Work Roles assessment are grounded in thousands of data points from a series of relevant comparator groups – and effectively tell us that people naturally prefer to work in 8 different ways:
You may, at least at face value, recognize yourself or some of your fellow trustees in these descriptions – and completing the assessment offers a whole range of insights around how you fare and what this might mean. For now, let’s turn to how these preferences might show up in the role of a pension scheme trustee. Let’s take 3 examples:
Example 1: Operating an effective risk management system
TPR’s General Code demands we ‘kick the tires’ on the risk management system that’s in place, to ensure that it’s complete, codified, up to date and engaging (see our recent article on learning from different sectors when it comes to pensions risk management). Tasks include monitoring risks and ensuring controls are effective, scanning the horizon for end evaluating the threat of new risks, and considering scenarios in which different risks might move together to the detriment of the scheme.
We need Analysts who like to delve into the potential impacts and mitigations of these risks – and we need Finishers who naturally meticulously check the detail to ensure nothing has fallen through the cracks and drive the discipline to embed these mitigations. But perhaps less obvious is the critical role of an Innovator here. We need Innovators to be willing to look around corners at what risks might be coming our way, proactively anticipating and offering more unconventional approaches to manage highly complex risks. Not only will individuals with these preferences do this naturally and well, but without them, we may miss significant risks before it’s too late – or we may miss out on the ability to look at and manage risks in different and more effective ways.
Example 2: Negotiating a funding agreement, buy-in deal or surplus distribution agreement
With an improvement in funding positions for many schemes, funding negotiations may be less protracted than in recent history. However, in approaching a transaction or agreeing other arrangements with a sponsoring employer, we can see the beneficial impact of certain behavioral preferences (or potential blind spots if they are absent).
For example, we need Strivers to push us to achieve the best outcomes on behalf of members and spot opportunities to realize these outcomes in negotiations. We need Relators to interact confidently and communicate effectively with sponsors, building a constructive relationship for the future. And equally critically, we need Optimists to remain calm under pressure, be resilient in the face of challenging discussions and focus on the enormous positive impact that could come from the right deal.
Example 3: Making a discretionary award decision in respect of member death benefits
As anyone who’s been a trustee for any length of time will know, decisions in respect of the award of death benefits for members can quickly become extremely difficult, with sometimes complex family situations, competing claims, and understandably high emotions. In this situation, our Supporters are key – their empathy and ability to understand and inhabit the different stakeholder perspectives ensures the decision is grounded in the real lives of those involved. Equally, we need Assertors to help us ensure a decision is reached, even in the face of complexity where it may feel like there is no single right answer. Analysts can help here, through assimilating the many data and input threads to drive the decision.
Understanding that we have an absence of individuals with these naturally complementary preferences in these roles might lead us to re-shuffle roles or even recruit, or it might prompt us to introduce other mitigations such as bringing in external perspectives, introducing structural prompts e.g. within agendas or chairing practices, or suggesting training, awareness or oversight – the options for mitigating responses are myriad, but only if first we have spotted (and socialized) the gap, abundance or blindspot.
Through reflection on behavioral preferences, we can also distil important, sometimes profound, insights on the group dynamic itself – who speaks up, whether the board is comfortable with conflict, the time and space allowed for discussion, the willingness to make decisions – all feed into the effectiveness of decisions that are made throughout meetings.
So how do we go about understanding what our own preference are and what the distribution of behavioral preferences might be on our own trustee boards and sub-committees? Where are our own gaps and abundances, and potential blind spots? And once we know what they are, what do we do with that information?
To help trustees answer these questions, we run effectiveness workshops, with the purpose of helping the board create a deeper understanding of how they can work even better together as a group, through a clearer understanding of how they each prefer to work individually.
We introduce the theory behind the importance of diversity in high-performing groups and the Work Roles model itself, before working through a series of interactive exercises that prompt the group to reflect on their individual results, consider the strengths of each Work Role and potential points of tension between them, and then perhaps most importantly, explore the overall makeup of the trustee board preferences and what this means for the activities they undertake.
The group come away from the session better equipped to work together through understanding their fellow trustee preferences and with a series of practical takeaways they and we have generated for what they might start, stop and continue doing and how they can solve for any significant gaps.
The workshops we’ve run have never failed to be both fun and useful. But to be truly valuable they must deliver lasting change. To do this, it is important that the workshop is not treated as a ‘one-off’ activity, but rather continues to live and offer benefits and sustainable change moving forward. We’ve got a whole host of exciting ideas around how to keep the change alive, but as a starting point, the trustee board can use the knowledge and language of the framework to call out the need to dial up or dial down different perspectives as situations require them, and – we hope – continue to identify ways to continually improve.
Often, gratifyingly, we hear that the vocabulary introduced by the workshop and model (innovators, finishers, relators etc.) continues to be used months or even years later by boards and wider teams to this effect.
Our team will be happy to tell you more about how Work Roles can help transform your team effectiveness today.
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