legality

In the last few days, Nationwide members will have received the Chairman’s letter 2025, inviting members to vote and attend this year’s virtual-only Annual General Meeting (AGM).

One claim that stood out for me and I wanted to check its veracity:

“Since we made the meeting online, we’ve had the highest member attendance for over 10 years.”

The executive summary: it’s doubtful whether this statement is true. It is more likely that there was higher member attendance when the AGM was run (for 20+ years) with parallel in-person and online formats — what most building societies refer to as the “hybrid” format.

Worse, despite stated desires to drive “greater engagement” from the membership, a switch to a virtual-only AGMs is likely a mechanism deliberately chosen to restrict member-led challenge and action, and will likely result in the opposite outcome. Virtual-only attendance of the AGM in 2024 was already down 14%, the year after it’s introduction.

1. The Nationwide AGM has been available “online” for at least 25 years (started c. 2000)

It has been possible to attend the Nationwide AGM online since at least the year 2000 – see this archive page which states the AGM “was broadcast live on the Internet, is now available as an archived webcast” (sadly the link to the archive no longer works). I’ve not been able to find any information on how many members have historically joined the meeting online, but I’m aware of viewing facilities being setup in branches across the country to allow members to join who were unable to attend in person, but didn’t have the necessary technology or know-how to join a virtual meeting unaided.

2. In-person attendance varied depending on the AGM venue

In-person AGM attendance was the norm from the very origins of the society, and AGMs were typically held in London. At the end of the last century, the Royal Lancaster hotel was the preferred venue. I’ve heard apocryphal stories from this era of members availing themselves of anything “consumable”: from plates of biscuits being tipped into handbags, to the WCs being stripped of all toilet paper.

Whether related or not, from 2004 the society experimented with taking the AGM on the road to various regional convention centres.

The result: the more “regional” the venue, the lower attendance. In one case (Gateshead) the attendance was less than 100 members. Attendance was clearly strongest when the AGM was held in London (probably due to population density, attractiveness of location, and the ease of transportation), with in excess of 500 members attending each time it was held in the capital.

3. 2020-21: Covid years and a rule change

Covid protection measures, lockdowns and social distancing meant members could not attend the AGMs in 2020 and 2021, which were virtual-only affairs by necessity. A small number of member-colleagues present ensured quorum was met.

The society tabled (and the members approved) a special resolution at the 2020 AGM to adapt the society’s rules given the exceptional circumstances (a global pandemic).

To quote the then chairman, David Roberts:

The fifth resolution is a special resolution to amend the Rules of the Society as stated in the Notice of AGM. This resolution is a direct consequence of the coronavirus pandemic, which has highlighted the need to update our Rules for the benefit of members.

The first change we are proposing is to be able to hold meetings allowing both a physical and digital presence of members. Although this rule change will help us at times like the present, we believe that giving members the option to attend meetings online as well as in person will increase member engagement, allowing those members who can’t easily travel to a meeting in person to attend digitally. I would like to stress that, unless there are exceptional circumstances, the intention will be to hold a combination of both physical and online meetings and not an exclusively virtual or online meeting.

David Roberts (Chairman) speaking at the Nationwide Building Society Annual General Meeting, 16th July 2020

4. 2022: Nationwide’s first (and only) “hybrid” AGM?

The society’s press release announcing the results of the 2022 AGM hailed its “first hybrid AGM”:

This year, the Society held its first hybrid AGM with members able to attend in person at Nationwide House [Swindon HQ], and able to fully participate online, including voting and asking questions by video or text. Members were able to submit questions in advance of the meeting by email and post. 

Given members had been able to join the AGM online for over 20 years by this point, the “first hybrid” claim is a little odd. The only distinction that could perhaps be drawn is the level of participation i.e. the ability to ask questions by video, and vote live in the meeting, given online voting and submitting questions in advance had been available for years, if not decades.

5. 2023 to date: Virtual-only AGMs

One year on from its first hybrid AGM in 2022 (and just three years on from David Roberts’ 2020 AGM pledge to the members that “exclusively virtual or online” meetings weren’t the intention), the new chairman, Kevin Parry, introduces the virtual-only 2023 AGM to complete a classic banking bait-and-switch:

This AGM is fully online and builds on our experience from last year. We discovered then that many more people attended online than made it in person, almost ten times as many in fact, and they were just as able to ask questions and vote as the people who were in the room.

Kevin Parry (Chairman) speaking at the 2023 AGM, 19th July 2023

Further, in response to a member question from the (virtual) floor:

…the question I think substantively: why are we holding it virtually rather than in
person? It’s to allow participation. Currently, I’m informed that we’ve got over 350
people online, that’s the biggest attendance we’ve had in eleven years, and so it is to
allow greater engagement with people.

What was Parry’s comparison for in-person attendance? During Covid? Holding the AGM in Gatesehad?

Further, if AGMs attract 10x the number of members online than in person, then it is hard to defend the claim made in the chairman’s 2025 letter that “we’ve had the highest members attendance for over 10 years”, as a combination of in-person and online attendance must have been greater in all years bar 2021.

If online members number 10x the in-person count as per the chart above, the chairman’s claim simply isn’t credible. Further, suggesting virtual only AGMs allow “greater engagement” defies logic: how does shutting the door to in-person attendees, excluding those that might not have the digital knowledge or capability at home, increase participation?

The path chosen by Nationwide appears to be part of a multi-step strategy to reduce participation and marginalise members:

1. Hold the AGM at unpopular times and in increasingly remote corners of the UK to reduce attendance
2. Use the pandemic as an opportunity to change the rules of the society
3. Restrict attendance to a virtual-only format, leveraging the rule change and the justification of lower in-person attendance brought about by a global pandemic
4. Use the virtual-only format to exclude some members, restrict transparency and more actively manage the Q&A session.
5. Further reduce member participation, engagement and power (e.g. Virgin Money disenfranchisement).

6. Nationwide is the only building society in the country to operate virtual-only AGMs

There are 42 building societies in the UK according to the Building Societies Association. Nationwide stands alone by refusing in-person AGM attendance. All other societies either offer in-person only or hybrid meetings. Further, in an effort to encourage member participation, they tend to schedule these at member-friendly locations and times.

7. Virtual-only AGMs worsen member participation and engagement

Digital exclusion issues aside, virtual-only AGMs support a degree of stage-management by the society’s board against the members:

• Instead of questions being answered in the order they are raised at an in-person AGM (i.e. queued at the microphone), questions submitted online can be vetted, re-interpreted and prioritised at the command of the chair.
• Questions can be pushed down the list and go unanswered in the time available.
• Members are denied full transparency into the questions other members are asking.
• There is no feedback mechanism: members’ can’t show their appreciation (or lack thereof) for the questions posed and answers given (i.e. cheers or jeers that use to be part of in-person meetings)
• Lastly, members are unable to meet and discuss matters with other members either side of the formal meeting i.e. virtual-only meetings restrict the opportunity for members to congregate, dicsuss and organise.

Combined, these factors likely result in worsening member participation and engagement, as members lose faith in the value of the AGM, as well as trust in the society and the board.

8. Legality of virtual-only AGMs is questionable

Virtual-only AGMs are not only flawed in terms of fairness and transparency. They may also be illegal. The Financial Reporting Council (FRC) challenged whether virtual only AGM satisfy the requirement of “place” (as stipulated in legislation) in its July 2022 publication Good Practice Guidance for Company Meetings:

I emailed the FRC to see if their guidance has changed since. It has not – see their reply below:

Our position on the interpretation of the law regarding AGMs has not changed since the publication of the July 2022 “Good Practice Guidance for Company Meetings.” Under the current legal framework, there remains some uncertainty as to whether s.311(1)(b) along with s.360A of the Companies Act 2006 supports virtual-only AGMs. As highlighted in the image within your email, this is due to the legal interpretation of the word ‘place.’

Given the uncertainty, companies authorised to run some form of virtual element under their Articles of Association continue to highlight a physical ‘place’ of meeting within their notice of meeting, indicating where the AGM will take place but, in many cases, may discourage shareholders from attending physically.

Our view is that companies should seek to maximise the participation and engagement of all types of shareholders on the register and, where appropriate, take advantage of technology to increase participation and engagement. As a result, in 2022, we, along with the AGM Stakeholder Group, created this guidance to assist companies opting for hybrid, virtual, or physical meetings.

Email response from the FRC, June 2025

Note that Nationwide is subject to the Building Societies Act (1986): the same lack of a definition of ‘place’ exists. The current UK government is also reviewing the practice, highlighting that virtual(-only) AGMs are not on firm ground from a legal perspective:

My department will also launch an ambitious consultation next year [2025] aimed at simplifying and modernising the UK’s non-financial reporting framework. Efforts to modernise will also include examining the potential for updating shareholder communication in line with technology and clarifying the law in relation to virtual AGMs.

Jonathan Reynolds, Secretary of State for Business and Trade (14 October 2024)