What will be the governance legacy of COVID-19 for pension scheme governance in the UK? Writing whilst still in lockdown, I speculate 4 key features of the ‘new normal’ we’ll face over the coming weeks and months.

1. The quarterly meeting cycle is over

The traditional quarterly meeting cycle of full-day meetings in person, with little board time in between, is surely over for good. Our transition to the online world has been sudden, but most have reacted well, scheduling in shorter but more frequent calls and focusing on the critical issues at hand. Are pensions still being paid? Do we still have a sponsor? Do we have enough trustees or governance committee members to make critical decisions?

We are, no doubt, a sociable industry, and there is nothing quite like meeting face-to-face. But online working brings agility, and dissolves travel and location costs and barriers. So a combination of longer face-to-face meetings combined with a number of shorter and focused online meetings, may be the way we see pension scheme governance carried out in future.

2. Professionalisation will increase at a more rapid pace

The professionalisation of pension scheme governance has been on the rise for a number of years, with many boards now having or considering a professional trustee/member and a professional scheme secretary or governance adviser.

There is nothing like a crisis of this sort to focus one’s mind on how one wants to spend the rest of the time we all have left. Many lay trustees do the role in addition to day jobs or as part of semi or full retirement. But will priorities now be evaluated, particularly for those in, or caring for those in, more vulnerable risk categories? If more lay trustees decide they simply cannot devote the time and attention to the complex demands of trusteeship, the pace of professionalisation will increase.

3. Definitions of collective effectiveness will broaden

Diversity of pension boards has been a big talking point in the last year, with TPR flirting with the idea of mandatory diversity reporting, and stating their intent to establish an industry group to consider what this means for pension governance bodies.

Gender diversity is a common talking point, but COVID-19 has really shone a spotlight on age and geographical diversity. It has also highlighted the importance of skills such as decision-making under pressure, and the ability to adapt quickly to changing circumstances. Board composition reviews going forward will likely take a broadened view of diversity and the types of skills we need our boards to display.

4. Risk Management will no longer be an ‘after-lunch’ slot

Pandemic Influenza has been the top major risk, in terms of likelihood and impact, on the UK national risk register since at least 2008. COVID-19 may not be influenza but it is certainly a pandemic. But which schemes had adequately addressed the risks such a pandemic might face on their risk register?

Future-planning and the workshopping of risk scenarios that may once have seemed far fetched will rise up the agenda. Boards have been considering Climate-risk and Cyber-risk over the last couple of years, but what else might lie on the horizon?

Stepping into the new world

So our new governance world may be more nimble, with more frequent meetings of varying formats. It may feature an increased number of professionals albeit on boards that display wider diversity and value skills such as resilience and agility more so than before. Risk Management will be reinvigorated, with enhanced focus on horizon-scanning and an increased awareness that sometimes what seems unthinkable becomes all too real, all too quickly!