A Nationwide customer has vowed to press on with his campaign for greater democratic representation at the building society, following an unsuccessful attempt to join its board. James Sherwin-Smith, a West Sussex resident, secured 12.5% of the vote at Nationwide's Annual General Meeting (AGM) on Wednesday, representing support from 75,939 members. This figure, however, was well below the 50% threshold required for him to be elected to the 142-year-old institution's board.
Sherwin-Smith's bid was notable as it aimed to make him the first customer-nominated director to sit on Nationwide's board in almost a quarter of a century. His candidacy followed a period of tension with the board, which had vetted and ultimately rejected his application, citing a lack of necessary experience for directing a £368 billion high street lender. The board had recommended members vote against his election, a recommendation bundled into a 'quick vote' option that allows members to endorse all board views with a single click, a system used by 87% of voters last year.
Undeterred by the outcome, Sherwin-Smith announced his intention to launch a new campaign advocating for changes at Nationwide. He criticised what he perceives as a drift from the building society's democratic ethos. His plans include standing for election again at the 2027 AGM and immediately beginning to gather member nominations. He also extended an invitation to other interested members to come forward as board candidates, offering to share his experiences and insights.
Building societies, unique in the UK financial landscape for being member-owned, legally grant customers the right to nominate peers for boardroom elections. Despite this, there are currently no member-nominated directors on the boards of any of Britain's 42 building societies, with Nationwide's last member director retiring in 2002.
Beyond board elections, Sherwin-Smith intends to launch a campaign to trigger a special general meeting. This meeting would propose significant reforms to Nationwide's rules, including the abolition of the 'quick vote' system, a guarantee of at least two board members nominated by members, and the introduction of binding votes on executive pay, mirroring practices in shareholder-owned companies. Further proposals include reinstating hybrid AGMs, which are currently online-only, and giving members a 'meaningful vote on major strategic decisions,' a move aimed at preventing controversies such as the lender's £2.9 billion takeover of Virgin Money. At Wednesday's AGM, Nationwide bosses faced numerous questions regarding governance, rising executive pay, and the board election process, with approximately 95% of votes supporting the board's pay report, which saw CEO Debbie Crosbie's remuneration nearly double to £4.7 million.
Nationwide acknowledged the engagement demonstrated at this year's AGM, noting it had the highest attendance in 15 years. A spokesperson stated, "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." Sherwin-Smith concluded, "The question is no longer whether governance at Nationwide should evolve, the question is how quickly members want that to happen. I intend to spend the coming year helping members answer that question."