Large age gaps between the trustees of a pension fund board can result in conflicts of interest between the young and the elderly, which can intensify the differences within the trustee board and negatively impact the decision-making process, research by a Dutch university has found.

The Universiteit van Groningen studied 313 trustee boards and found that age differences and other demographic differences lead to polarisation and the creation of subgroups. By nature people tend to divide others into groups based on visible characteristics, such as age or gender, the study said. While this makes things clear, it can also lead to animosity towards people outside the subgroup.

However, the report admitted that diversity in the board also leads to positive effects, such as different viewpoints and more available information.

To reduce the risk of conflicts of interest to a minimum, the researchers recommend the boards to self-evaluate regularly. This will reduce the differences between interest groups and helps the collaboration within the board.

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