Nationwide Clients Launch New Campaign for Democracy
Clients across the nation are gearing up for a fresh campaign aimed at bolstering democracy within building societies, promising to continue their efforts after a recent setback in trying to secure a board position.
James Sherwin-Smith garnered roughly 12.5% of the votes during the mutual’s annual general meeting on Wednesday, translating to the backing of 75,939 Nationwide members.
This support, however, fell significantly short of the 50% needed to become the first client representative on the board of the 142-year-old building society in nearly 25 years.
The outcome came after a lengthy and contentious exchange between the West Sussex resident and the board, which had scrutinized and, ultimately, dismissed his candidacy, stating he lacked the requisite experience to lead the £368 billion financial institution.
The board had also recommended members vote against former consultant Oliver Wyman, which complicated his chances. This is due to nominations being combined into a single “quick vote,” allowing members to approve the board’s recommendations with just one click.
Sherwin-Smith is determined not to be discouraged by the results, announcing plans for a new campaign to push for changes at Nationwide, which he and others feel have strayed from democratic values.
He disclosed his intentions to run for election again at the 2027 general meeting and is set to begin collecting nominations from fellow members right away. He’s encouraging anyone interested in joining the board to come forward, expressing a desire to share his experiences.
In the UK, member-owned building societies are among the few sectors that legally allow clients to nominate peers for board elections.
Yet, none of the 42 building associations in the UK, including Nationwide, have any member-nominated directors since the last one retired in 2002.
Sherwin-Smith is also planning to advocate for a special general meeting to amend Nationwide’s rules. Among the proposals are aligning their policies with those of shareholder-owned firms, eliminating instant voting, ensuring at least two directors are members-nominated, and implementing binding votes on executive compensation.
This special meeting aims to restore hybrid shareholder meetings, currently online-only, and seeks to ensure members have a significant voice in crucial strategic decisions, addressing concerns like those raised during Virgin Money’s £2.9 billion takeover.
Executives faced various inquiries during Wednesday’s shareholder meeting, particularly regarding governance, rising executive pay, and the election process. Around 95% of members supported the board’s recommended pay report for Nationwide, which recently saw Chief Executive Debbie Crosby’s compensation nearly double to £4.7 million.
“The question is no longer whether Nationwide governance should evolve; it’s about how quickly members want that change,” Sherwin-Smith noted. “I will spend the upcoming year assisting our members in answering that question.”
Nationwide stated, “This year’s General Meeting recorded the highest attendance in 15 years, reflecting strong engagement among members. The board’s recommendation received overwhelming backing, with 88% of members concluding that electing Sherwin-Smith was not in the best interest of the association or its members.”
