Peers question whether building society governance law is fit for purpose – “not acceptable” that societies “can fiddle who gets onto the Board”

EMBARGOED UNTIL 00:01 BST 7 JULY 2026

7 JULY 2026, LONDON – Peers question Board controlled elections and “Quick Vote” as Parliament considers enhancing building society governance standards

The House of Lords yesterday debated whether the governance framework for UK building societies should be modernised during Grand Committee on the Financial Services and Markets Bill.

Moving Amendment 142E, Baroness Bowles of Berkhamsted proposed that HM Treasury require the Financial Conduct Authority to establish minimum governance standards for building societies, covering areas including Elections, voting procedures, executive remuneration, Member representation on Boards and Annual General Meetings (1).

Speaking during the debate, Baroness Bowles questioned whether “you can have what is essentially a substantial financial institution having a Board that can fiddle who gets onto the Board and who does not“, adding that “the situation that has gone on is not acceptable” (2, 3, 4).

She also criticised bundled “Quick Vote” mechanisms, describing them as “bundled blind voting”, and asked:

“Instead of encouraging people to ‘Quick Vote‘, shouldn’t Boards instead be encouraging voters to take their time… In other words, shouldn’t Boards be asking people to ‘Slow Vote’ instead?“

Responding for the Opposition, Baroness Neville-Rolfe said she was “particularly sympathetic” to concerns about bundled voting, describing it as capable of creating “a democratic deficit”. While questioning the wider regulatory approach, she suggested that narrower legislation to address bundled voting could be appropriate.

Responding for the Government, the Minister, Lord Stockwood, said that building societies already operate within a robust legislative and regulatory framework and that the Government did not believe the proposed amendment was the right mechanism for reform.

James Sherwin Smith, the Member Nominated Candidate standing for election to the Board of Nationwide, and campaigning for reform of building society governance, said:

“For a Member of the House of Lords with Baroness Bowles’ expertise in financial services regulation to say that a large building society should not be in a position where its Board can ‘fiddle who gets onto the Board and who does not’ is highly significant.

“With just over a week (5) remaining before Nationwide Building Society’s 2026 AGM, 9.3 million Members (6) still have the opportunity (7) to elect the Society’s first Member Nominated Director for more than twenty years (8).

“Yesterday’s debate exposed the real question facing Parliament. The Government says the existing framework is robust. Baroness Bowles argued that it permits practices that would not be acceptable elsewhere. Members can draw their own conclusions, but I believe, given my experience, that in some areas the Building Societies Act (1986) is no longer fit for purpose.”

ENDS

Notes for editors

1. Amendment 142E can be found within the Fifth Marshalled List of Amendments: https://bills.parliament.uk/publications/67088/documents/8551
2. Hansard, House of Lords, 6th July 2026, Grand Committee, Financial Services and Markets Bill (uncorrected rolling version): https://hansard.parliament.uk/lords/2026-07-06/debates/F52D8CA6-DABF-4A49-8239-6BE831DF8DC6/FinancialServicesAndMarketsBill(HL)?__cf_chl_f_tk=MCE9rDL0c7_6h9ZrrOnZOHs2dn.bzEQuvdXa2luXCZY-1783406006-1.0.1.1-BIxlddoCT9UJpH6i7VzJYPqxoOJ9q9EN9M8Q_HZCl5E#contribution-CACF8651-52EB-4DE5-9E84-CD2FAC9EE874
3. Parliamentlive.tv clip: https://parliamentlive.tv/event/index/5f7cae32-6994-426f-9c0e-77a93b35a91f?in=17:42:12
4. If a bill is being scrutinised in a House of Lords Grand Committee, voting is strictly prohibited. Decisions can only be made by absolute unanimity. If there is even a single dissenting voice against an amendment, it must be withdrawn so that the wider House of Lords can formally debate and vote on it during the report stage. See 8.102 of the Companion to the Standing Orders and Guide to the Proceedings of the House of Lords – 2013: https://publications.parliament.uk/pa/ld/ldcomp/compso2013/10.htm 
5. Voting in advance of the Nationwide AGM closes at 10.30am on Monday 13th July. Members can vote by attending the AGM, starting 10.30am on Wednesday 15th July.
6. 9.3 million Nationwide members are eligible to vote at the 2026 AGM. In 2025, 670,000 voted, 87% of whom used the Quick Vote.
7. In 2026, the effect of the Quick vote is to cast a vote FOR resolutions 1-13, but AGAINST resolution 14: to elect James Sherwin-Smith.
8. The last Member Nominated Director of Nationwide Building Society retired in 2002. The last Member Nominated Candidate stood for election unsuccessfully in 2005.

CONTACT

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