a day ago
Nationwide faces member backlash over boardroom cronyism
Nationwide is facing a backlash over boardroom cronyism after claims it has rebuffed attempts to allow ordinary members of the building society join its board.
The mutual, which has 16m members, is holding its annual meeting on Friday when customers will be asked to re-elect 13 board directors, including Dame Debbie Crosbie, the chief executive.
It has provoked a backlash because none of the directors have been nominated by members, who believe they lack the experience of running a mutual.
Nationwide has become mired in controversy after it bought Virgin Money last year, stoking fears it wanted to act like a commercial lender. A pay deal of almost £7m for Dame Debbie, which will be voted on by members on Friday, has also raised concerns over its direction, with critics saying the award mirrors the worst of bonus culture at big banks.
James Sherwin-Smith, who led an unsuccessful campaign to become a non-executive, said the board did not have enough people with a mutual background and that nominees were chosen without members' involvement.
He added: 'It's unclear to members where the representation for us is. It feels to us that the board is doing what the board wants, not what the members want.'
Mr Sherwin-Smith said the board was stifling attempts to allow more member representation, and that Nationwide had not included a member-nominated representative since 2002.
While Nationwide's board is nominated by existing directors, members can put forward candidates if they obtain 250 backers to endorse them.
Mr Sherwin-Smith said he received 600 signatories for his attempt but was rebuffed. Nationwide has disputed the claim saying the number of valid nominations received fell 'substantially short of the threshold'.
Members weigh in
Unlike a bank, Nationwide is a mutual run for the benefit of members and not shareholders. While some members say they are happy with its service, they say they feel let down by the society's corporate governance standards.
Daniel Peck, a 26-year old software engineer from Worcester, said he was 'extremely dissatisfied' with board structure and wanted more members represented.
He added: 'It feels like normal members don't have any sort of say whatsoever. They need to make it easier for the members to get the people that they want on the board.
'It would make the members feel like they actually have a voice. It does feel like the board are just a force unto their own.'
Pauline Mead, a retired secretary from Watford, joined Nationwide after five decades as a Barclays customer because of its mutual status. She says she is concerned the society is becoming 'like a bank'.
She added: 'There's 13 directors running the show and I thought I could vote them out – but all of them are people re-applying rather than new candidates. I would like the whole lot off actually and let's start with somebody that I might like to vote in. I don't know how they justify all those people on the board'.
Nationwide said that while it was aware of 'small amounts' of criticism, it could not see any evidence that the concerns were widely shared among the wider membership.
The group holds regular consultations to gauge member views, including its Member Voice panel which has 6,500 members as well as an annual survey of 5,000 other members. It said the board was the 'right size' for its responsibilities.
A Nationwide spokesman said: 'Nationwide has become the second largest provider of mortgages and retail deposits, and remains first for customer satisfaction, because it can attract, retain and motivate talented leaders to run a business of this scale and prioritise member value.'
