Open letter to Rt. Hon. Andy Burnham MP

[Reported in The Times: Burnham urged to amend Building Societies Act (The Times)]

Dear Andy,

Given you are expected to become Prime Minister of the United Kingdom in the next few days, we would like draw your attention to this matter:

The governance of Britain’s building societies deserves urgent parliamentary attention.

During the recent House of Lords debate on building society governance, Baroness Bowles of Berkhamsted warned that “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.”

These are not words that should be lightly dismissed. They come from a former Chair of the European Parliament’s Economic and Monetary Affairs Committee and reflect a growing concern shared across Parliament, the City, Academia and members of mutual societies.

Building societies occupy a unique and valuable place in British financial services. Their Member owned structure should make them exemplars of democratic accountability. Yet aspects of the Building Societies Act 1986 and current governance practices now appear increasingly out of step with modern expectations.

Members of both Houses of Parliament have called for debate as to whether the Act should be modernised so that governance standards better reflect those expected elsewhere in the financial sector. That debate is overdue.

Particular attention should be given to election processes. No Board should be able to exercise disproportionate influence over who ultimately joins it. Equally concerning is the continued use by some organisations of bundled or “Quick Vote” mechanisms, which encourage Members to cast a single vote in favour of every Board recommendation, including director elections, without considering each resolution on its merits.

Good corporate governance depends upon informed and independent voting. Members should instead be required to cast individual votes on each resolution. A considered “slow vote” strengthens Member democracy, enhances Board accountability and builds confidence in the legitimacy of election outcomes.

Britain rightly values its mutual sector. Preserving public trust in building societies requires governance arrangements that are beyond reproach, not merely compliant with legislation drafted four decades ago.

Parliament should now provide time to consider how the Building Societies Act can be updated to protect Member democracy, strengthen accountability and ensure that the governance of mutual financial institutions meets the standards rightly expected in the twenty-first century.

Yours sincerely,

• The Rt Hon. Lord Biggar, CBE
• Lord Young of Acton
• Ian Luder, CBE (Lord Mayor of London, 2008-09)
• Navendu Mishra, Member of Parliament for Stockport
• Andew Johnston, Professor of Company Law & Corporate Governance, University of Warwick
• David W. Duffy, Chair, The Corporate Governance Institute
• Alan Debenham, Secretary, Building Societies Members Association
• James Sherwin-Smith, Member Nominated Candidate for Election to the Board at the 2026 AGM of Nationwide Building Society.