James Sherwin-Smith, a customer of Nationwide, Britain's largest building society, has criticised the lender for what he describes as "unfair" treatment and undermining democratic governance. This follows the society's decision to tell members to vote against his candidacy for the board.
Board Election Controversy
Sherwin-Smith is seeking election to the board at the annual meeting in July. Nationwide confirmed it would give members a default "quick vote" option that includes a vote against him. He argues that this has tilted the field against him, making it harder for members to support his candidacy.
Nationwide is mutually owned by its member-customers. The last member to sit on its board retired in 2002. Sherwin-Smith has campaigned to change that, arguing it would improve accountability at the lender amid concerns that members do not have enough say.
Nationwide's Stance
Nationwide's chair, Kevin Parry, stated that Sherwin-Smith's election would not be in the best interests of the society due to a lack of necessary experience. Nationwide has 17 million members and over £377 billion in assets.
Sherwin-Smith countered: "They have skewed this massively against me and they've also attacked me on my suitability for the board." He noted that the quick vote option, which last year was used by 87% of about 670,000 votes cast, makes it an uphill battle to inform members of the choice on offer.
He called the move a "dangerous precedent for mutuals and democratic governance." Labour MP Navendu Mishra recently criticised "emerging governance issues" across the building society sector.
Election Materials Dispute
Nationwide also blocked Sherwin-Smith from making changes to election materials to inform members that they should not use the quick vote if they wish him to join the board.
Sherwin-Smith rebutted Nationwide's criticisms about his experience, noting his background as a former executive at payments company Vocalink and a management consultant at Oliver Wyman focused on retail banking.
In an update to his campaign, he wrote: "Boards benefit from diversity of perspective and thought, not simply similarity of background. Ultimately, I believe members should have the right to be represented by one of their own, who has been nominated and elected by them. I don't believe it is right for an incumbent board to act in a way that entrenches their position and disadvantages a member-nominated candidate."
Parry responded: "No board, regardless of whether it is of a mutual or public company, should ever recommend the appointment of a director who does not have the skills and experience necessary to do the job. While our members will have the final decision in this election through the normal voting process used for all directors, Nationwide's board could not recommend Mr Sherwin-Smith for election following its assessment."
