MP Slams Building Societies' Member Vote Practices

Labour MP Navendu Mishra has expressed significant concerns regarding governance practices within the building society sector, specifically targeting Nationwide. In a formal letter to Nationwide's chair, Kevin Parry, Mishra highlighted issues such as the alleged overuse of "quick vote" options at annual general meetings (AGMs) and the infrequent allocation of board seats for member-nominated directors.

Mishra's letter, sent weeks before Nationwide's AGM, underscores a broader debate about democratic representation in member-owned institutions. He argues that while building societies are experiencing substantial growth, their commitment to member democracy must be more evident. The MP specifically questioned why direct member voice in the boardroom remains uncommon when members are the ultimate owners.

Further criticisms leveled against Nationwide and similar institutions include the adoption of online-only AGMs, which may disenfranchise members with limited internet access, and the refusal to hold binding votes on executive pay. This situation echoes past controversies, such as the 43% pay rise for Nationwide's chief executive, where shareholders at listed banks have binding votes, but members at building societies do not.

Nationwide has defended its practices, stating that online AGMs have increased participation and that quick vote tools are clear and easy for members. They also noted that the chair will respond to the MP's points. The company also mentioned that 95% of votes cast supported their remuneration policy, despite pay votes being non-binding.