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?
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.
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. 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.
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.