A Nationwide customer has vowed to fight on after losing a historic attempt to join its board and is plotting a fresh campaign to boost democracy at the building society.
James Sherwin-Smith secured about 12.5% of the vote, representing support from 75,939 Nationwide members, at the mutual’s annual general meeting on Wednesday.
That left him far short of the 50% threshold needed to become the first customer to join the 142-year-old building society’s board in nearly a quarter of a century.
It came after a tense few months between the West Sussex resident and the board, which vetted and ultimately rejected the 45-year-old’s boardroom run, saying he did not have the experience required to help direct a £368bn high street lender.
The board recommended that members vote against the former Oliver Wyman consultant. The move hindered his chances of being elected, given boardroom recommendations are bundled into a single “quick vote” option that allows members to back all boardroom views with a single click of a button.
Last year 87% of about 670,000 votes cast used the quick-vote system. Nationwide has about 19 million members, though only a fraction of those usually cast votes.
Sherwin-Smith said he would not be deterred by the outcome, adding that he was launching a fresh campaign agitating for change at Nationwide, which critics claim has been drifting from its democratic ethos.
He announced on Wednesday that he would stand for election again at the 2027 AGM and planned to start gathering member nominations immediately. He encouraged others interested in becoming board candidates to come forward, saying he would “share what I’ve learned” with other members.
Building societies, which are owned by their members, remain one of a few UK sectors that legally give customers the right to nominate peers for boardroom elections.
However, the last member to sit on Nationwide’s board retired in 2002 and there are no member-nominated directors sitting on any of Britain’s 42 building society boards.
Sherwin-Smith said he would also launch a campaign to trigger a special general meeting aimed at reforming Nationwide’s rules.
It includes proposals to end the quick vote system, guarantee at least two board members are nominated by members and introduce binding votes on executive pay, in line with shareholder-owned companies.
The special meeting would call to reinstate hybrid AGMs, which are currently online-only, and give members a “meaningful vote on major strategic decisions” to avoid the kind of controversies triggered by the lender’s £2.9bn takeover of Virgin Money.
after newsletter promotion
Nationwide bosses faced a range of questions at the AGM on Wednesday, including many raising concerns about its governance, rising executive pay and the board election process.
About 95% of votes were cast in support of Nationwide’s pay report, which was recommended by the board, after the building society nearly doubled the pay of Debbie Crosbie, the chief executive, to £4.7m.
“The question is no longer whether governance at Nationwide should evolve, the question is how quickly members want that to happen,” Sherwin-Smith said. “I intend to spend the coming year helping members answer that question.”
Nationwide said: “This year’s AGM demonstrated the strength of engagement across Nationwide’s membership, with the highest attendance in 15 years.
“The board’s recommendations received overwhelming support and 88% of our members decided that electing Mr Sherwin-Smith to Nationwide’s board would not be in the best interests of the society or its members.”
