Trustee boards have adapted well during the Covid crisis and have embraced new ways of working and meeting according to Aon.
However the professional services firm says there has been an increased burden on chairs and secretaries of trustee board as they try to maintain efficient and effective governance.
The lockdown in March created real challenges for many boards: with practical questions on how to hold virtual meeting to maintain effective governance of schemes. This issue was exacerbated by the fact that many board members are spread over a wide geographic areas.
Aon partner Susan Hoare says: “The initial technological challenge that trustee boards faced in simply finding a way to meet, has largely been overcome.”
She adds that once the pandemic is over, Aon expects that few pension schemes will revert fully to the traditional quarterly face-to-face meeting cycle but will instead embrace the experience of the last six months and have some face-to-face meetings, combined with more frequent short virtual meetings.
The balance between virtual and face-to-face meetings is likely to vary from scheme to scheme and on the issues that need to be discussed.
Hoare adds: “We are now seeing schemes moving to the next stage: one of acceptance of where we are and that these conditions are likely to prevail for a while yet. This is producing some constructive and innovative thinking about how to make this work and how to find the best way to use trustees’ time.”
She says many schemes are taking the opportunity to reflect on what has worked well and what less so.
“Many schemes are evolving trustee meetings to be more topic led – sessions purely to look at the specifics of GMP equalisation are a case in point.
“But finding ways to conduct trustee training are another matter altogether – it’s not straightforward for trustees to stay up to speed without face-to-face and discussion-led sessions.”
She says this is increasing the pressure on chairs and secretaries to maintain a cohesive board. “They have to keep all trustees involved and need to avoid the risk of a board fragmenting into different groups or of a two-tier structure developing.
“As ever, the need to be nimble is of the highest importance — this is a situation which is still developing and which will require flexible thinking for some time to come.”