Don’t turn up! Big firms bar investors from AGMs
Great to read this article from Patrick Tooher in today’s Daily Mail addressing this important topic (which also kindly quoted me).
You can read the article online: Don’t turn up! Big firms bar investors from AGMs
Limiting the ability for shareholders and members to hold boards to account via online-only (and thus often highly stage-managed) AGMs is bad for governance, and the Financial Reporting Council good practice guide questions the legitimacy i.e. does the definition of “place” include some corner of the internet?
A number of organisations have used the extraordinary circumstances of the pandemic to eliminate the in-person AGM. The argument that virtual-only is more cost effective and convenient for (some) people ignores the potential for Digital Exclusion, but perhaps more significantly, they restrict the opportunity for unfiltered scrutiny and challenge. If organisations were truly focused on convenience and interested in increasing attendance, they would hold hybrid meetings at more suitable times.
It’s one of my concerns with regards to Nationwide Building Society. For an organisation that prides itself on fairness, and being member-owned, a virtual-only AGM held mid-morning on a Wednesday in the middle of the summer holidays is a strange choice.
Only 300 people attended last year, down from in person AGMs in the early 2000s that attracted multiples of that amount. 300 people is less than 0.002% of the 16 million members. If Nationwide can organise hybrid voting, why can’t it organise an hybrid meeting?
The Times: “he is asking a lot of the right questions.”
My thanks to Patrick Hosking at The Times for putting Nationwide’s recent “big thank you” payment under scrutiny, and for this final paragraph.
Read his article in the Times: Nationwide is paying out £600m to its members. But should it be? (19 March 2025)
I rather liked this final paragraph:
“Sherwin-Smith is too purist about those cash payments, but he is asking a lot of the right questions. Members who want to nominate him as a board director can find him on james4nationwide.co.uk. Nationwide does need to explain better where it is going, how it allocates rewards and why.”
Screenshot of the first few paragraphs of the article below.
Daily Mail: Nationwide forced to defend £50 takeover reward
My thanks to Patrick Tooher and Jane Denton for writing this article for the Daily Mail (online edition: This is Money).
It follows a longer post I wrote about the “Big Thank You” payment: The Big Nationwide “Thank You”: £50 for what and why?
You can read the article in full here: Nationwide forced to defend £50 takeover reward (17 March 2025)
Patrick and Jane quoted me as follows:
James Sherwin-Smith, who led the campaign for a vote and wants to join the Nationwide board, said the society should be more ‘upfront’ about how its reserves, which belong to members, are used.
‘Nationwide has a habit of doing something first, and then asking or ignoring members afterwards,’ he added.
‘This “thank you” payment is another example of why members should be more engaged, and their perspectives better represented,’ he said.
He also fears the final bill for buying and integrating Virgin Money could top £5billion.
The Daily Mail: Nationwide accused of ‘rampant profiteering’
My thanks to Simon English, who wrote this article in the Daily Mail (online edition: This is Money) examining the recent increase in members’ credit card interest rates.
“Rampant profiteering” had to be justified – see my detailed research here into the history of credit card offers and rates in this article: Is Nationwide becoming more like a bank? A case study of credit card pricing.
Read the full article here: Nationwide accused of ‘rampant profiteering’ as it hikes credit card rates by up to 50% (6 March 2025). It was further syndicated in a number of regional and local titles across the UK.
Simon quoted me as follows
Nationwide is widening its profit margins at a time of stress for many of its members, perhaps giving cover to banks to do the same. It is rampant profiteering and I cannot see how they can justify this move.
And:
Long-standing Nationwide cardholders face higher rates. Mutuality should mean lower prices, but instead members are getting the same treatment as customers of a profit-maximising bank. I wonder where Nationwide is going with this?
UPDATE: An interesting development – BBC “Watchdog on The One Show” (19 March) followed up on the story, disclosing that members could opt-out of the announced rate increase and stay on their current rate. However members would not be allowed to add further purchases to the card as a result. So members with big balances will not have to accept a 50% increase from 9.9% to 14.9%, provided they use a different card for future purchases.
You can watch the clip on BBC iPlayer – it’s 2 minutes starting at the 9m 10s mark.
FT article: What does it mean to be a building society member?
I am grateful to Akila Quinio who quoted me in this Financial Times piece published today regarding Building Society membership: What does it mean to be a building society member? (2 August 2024)
She asked me three questions given I am running for election to the board of Nationwide: my full answers are below.
If you’d like to support my candidacy, it’s a 3 minute task to complete a one page nomination form.
1. What are the benefits of being a member?
The mutual structure means that as a member you are a customer and an owner of the society – there are no shareholders. Membership therefore means the society should be solely focused on delivering the best outcomes for members in terms of the products and services it offers, and members have the opportunity to determine how the society is run and governed. Mutuals are an important competitive force and are a check and balance on the shareholder-owned financial services industry. (See separate article on this topic: “Why mutuals matter“.).
2. How much power does it give you?
Membership power is limited to what is enshrined in the memorandum and rules of the society, and to what is protected by law, primarily under the Building Societies Act (1986). In theory, members can change the rules of their society, call and attend general meetings, propose and vote on resolutions, nominate and elect board members. Over time, the democratic power of the mutual “one member, one vote” governance model has been steadily eroded (See how voting at the Nationwide building society has changed over time: “Why I believe access to the register is needed.”)
3. And are there any drawbacks?
The degree of influence that the membership has on society affairs is dependent on how active the membership is – if members are passive, and don’t exercise their powers, the organisation becomes increasingly autocratic. Take the recent Nationwide AGM as an example. There were no alternative member proposed resolutions or alternative board candidates. Voting turnout was less than 4%, and all but one of the resolutions and re-elections were approved at 95% or higher.
If Nationwide was a country (and with 16 million members eligible to vote, it has that scale), that election setup and result would be cause for alarm to any casual observer.
This is why I am seeking nominations from fellow members to stand for election as a director of Nationwide. I want to breathe more life into the membership model – with more members actively engaged. Nationwide is and should remain a mutual that is members owned, but it should also be run and governed accordingly. This is important for Nationwide, but also for the benefit of everyone in the UK, given its position as the largest mutual and the second largest mortgage provider.
A healthy, engaging and competitive Nationwide means better banking for all.