For the first time in 21 years, Nationwide Building Society members will see a genuine choice on their AGM ballot paper. Jeremy McKeown sits down with James Sherwin-Smith, fintech executive, former MasterCard senior leader, and Oliver Wyman strategist, who is standing as the first member-nominated candidate for the Nationwide board since 2005.

In this episode, James reveals what it actually takes to challenge the UK's largest building society: an FCA hearing, 350 hand-collected paper nomination forms, and a year-long battle over access to the member register. We explore why the Virgin Money acquisition went through without a member vote, why mutuals matter for everyone (not just their customers), and what every Nationwide member needs to know before ballots land in June ahead of the AGM on 15 July.

Whether you're a Nationwide member, a building society customer, or simply interested in corporate governance and financial democracy, this conversation exposes a quiet erosion of member rights and what one maverick is doing about it.

What You'll Learn

• Why Nationwide's acquisition of Virgin Money never went to a member vote — and what it revealed about the society's governance
• How the "quick vote" box on Nationwide's ballot steers c. 85% of votes straight to the board's recommendation
• The story behind James's FCA hearing (the first in 30 years) and his statutory fight for access to the member register
• Why the bar for member nominations was raised five times higher in 2000 — and what that means for democracy in mutuals
• How a strong mutual sector keeps the wider banking market honest (and why mutuals didn't need bailing out in 2008)
• Why virtual-only AGMs are bad for member accountability
• The difference between member ownership in theory and in practice at a £300bn institution
• What every Nationwide member should do when their ballot arrives in June

Links & Resources

• James's campaign website: james4nationwide.co.uk
• Connect with James on LinkedIn
• Jeremy on Substack: Hypernormal Times
• Email Jeremy: jeremymckeown@gmail.com
• Sponsor: Progressive Equity
• Training partner: Finance Talking

Nationwide Building Society, Nationwide AGM 2026, James Sherwin Smith, member-nominated director, building society governance, Virgin Money acquisition, UK mutuals, mutual building society, corporate governance, FCA, financial democracy, member voting rights, Nationwide ballot, quick vote, cooperative banking, retail banking UK, Jeremy McKeown, In the Company of Mavericks

For the first time in 21 years, members

of the UK's largest building society will

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see real choice on their ballot paper.

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Nationwide is the country's second-largest

lender, but fewer than 4% of its 9.1

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million eligible members

typically vote at its AGM.

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And the last time someone stood for

election from outside the boardroom,

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Tony Blair was Prime Minister.

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My guest today is trying

to change all that.

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James Sherwin Smith is a fintech

executive, former senior MasterCard

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executive, and Oliver Wyman strategist

who has studied the cooperative

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movement, and he's attempting to become

the first member-nominated candidate

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on the Nationwide ballot since 2005.

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To get there, he's been through an

FCA hearing, collected 350 paper

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nomination forms by hand, and gone

toe-to-toe with the board over

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access to the member register, and

all that just to become nominated.

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In this episode, we get into why

he's doing it, what the Virgin Money

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acquisition revealed about Nationwide's

governance, why mutuals matter for

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everyone, not just their customers, and

what every Nationwide member needs to

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know before ma- ballots land in June

ahead of the AGM vote in mid-July.

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I'm Jeremy McEwen, and this is "In the

Company of Mavericks," a podcast where

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we help serious active investors navigate

market volatility, protect capital, and

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uncover new ways to confidently grow

wealth in these radically uncertain times.

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However, what you're about to

hear is not any kind of advice,

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but just for your information

and hopefully your entertainment.

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I'm not your advisor.

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You should take responsibility for the

decisions you take about your wealth.

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Please enjoy my conversation with

the maverick, James Sherwin Smith.

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Brought to you by Progressive Equity.

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So James, thanks for joining.

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It's great to meet you

and find out about you.

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Can we start just there?

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Who are you, and how did you end up

running a campaign to be elected to

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the UK's largest building society?

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Jeremy, first of all, thank you so

much for having me on the podcast.

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I love the title, right?

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I like being considered a maverick.

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So I'm James Sherwin Smith.

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My background is in financial

services, strategy, consulting, and

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then latterly in fintech and payments.

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Over that time, I've spent a lot of time

looking at how institutions actually serve

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their customers, not just commercially,

but also structurally how it works.

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Nationwide is unusual in retail financial

services because it's a mutual society.

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That's how it's defined in the FCA.

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It's the largest building

society in the country,

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second-largest lender in the land.

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And because it's a mutual, it is governed

by a one member, one vote policy.

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So if you're a shareholder

bank, you'd have shareholders,

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and you get one vote per share.

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But in the mutual model,

it's one member, one vote.

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And so it should make it one of the

most accountable, arguably, financial

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institutions in the UK because it has

nine point one million members that are

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eligible to vote in the upcoming election.

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When I looked at it closely over the

last couple of years, and I studied the

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cooperative sector actually back in two

thousand and eight when I was working

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at Oliver Wyman, I began to see perhaps

a bit of a gap between the principle

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of how governance should work and how

it's actually working in practice.

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The last couple of years of me studying

how Nationwide is performing and behaving

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has led me to stand for election, so

I will be the first member-nominated

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candidate on the ballot for election to

the Nationwide board in twenty-one years.

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The last person to do this

was in two thousand and five.

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They were not successful.

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Nationwide has had a history in living

memory of member-nominated directors

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serving on the board, and there was

a period in the nineties when three

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served on the board concurrently,

so about twenty-five percent of the

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board seats were member-nominated.

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So that's the bit of the history.

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It's a bit about me, but

really looking forward to the

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conversation and digging into it.

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When was the moment in that process that

you thought, "Right, I'm gonna do this"?

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'Cause it's a big campaign.

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You don't do these sort of things lightly.

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It's a great question.

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So I think if I wind the clock back to

March of twenty twenty-four, so just over

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two years ago now, Nationwide announced

that it was planning to buy Virgin Money.

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Yes.

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So Virgin Money is a listed bank.

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It actually trades as Clydesdale Bank

trading as Virgin Money, so there's

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a whole load of history around what

built up to become Virgin Money.

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But basically, Nationwide, a mutual,

was making an offer to buy a listed

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bank, and that kind of piqued my

interest, and I kind of looked into

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it and I tried to understand why,

what real benefits would come to

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me as a member of that acquisition.

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I also had in the back of my

mind, well, surely this should

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be put to a vote of the members.

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The board said, "No.

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A vote is not required," and

they basically pushed f- quite

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aggressively on the timetable

to basically buy Virgin Money.

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And I ended up supporting a gentleman

called Michael Armstrong, who was

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running a petition at the time to say

Nationwide members should be given

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a vote on the Virgin Money deal.

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That was obviously not

a successful campaign.

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A vote wasn't held, although Virgin Money

shareholders, of course, got to vote as

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to whether they should sell their shares.

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Yes.

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Nationwide members never got a vote

as to whether they wanted to buy it.

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And at the end of that time, Michael

Armstrong was de-banked by Nationwide.

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That kind of made me pause for thought

because at that point I'd been working

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behind the scenes, but that whole process

just made me quite interested in how

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Nationwide was performing, how it was

being governed, what the health of that

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was within the lens of this report that

I'd written back in two thousand and

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eight about the cooperative sector.

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And at the end of that summer, I

basically said, "You know what?

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I've studied the law.

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I've studied the rules.

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There is a route by which a member

can be nominated by their fellow

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members and be on the ballot and

then be put forward to election, and

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potentially be elected to the board."

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My feeling- And certainly some of

the evidence suggests that members

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just aren't engaged as they should

be in the running of the society.

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I think really why I'm doing this

is because I think there should be

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much greater member engagement, and I

think there should be a strong member

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voice directly representing members'

interests round the board table.

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So you've obviously studied

this industry for a long time.

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Are you of the view that the acquisition

of Virgin Money was the wrong thing to

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do, or is it just a matter of principle

around the ability of the members

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to be able to sanction this move?

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On Virgin Money itself, I just don't know.

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I just don't have enough information,

and that's part of my concern-

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Yeah ... which is there just isn't enough

transparency into why this deal was done.

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There's some nice- It's too early

to know in, in the context of M&A.

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What we do know is most M&A doesn't work.

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Integrating retail banking institutions

is enormously complex, and the benefit

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realization won't be known for many years.

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Actually, when Nationwide set out to

say that it wants to buy Virgin Money

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in the actual M&A documentation, it

basically said, "It's gonna take us

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six to twelve months to understand

what we've bought, and then it'll be

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a multi-year journey thereafter to

actually integrate what we've bought."

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But there is no plan that we as members

have seen, and we don't know how it's

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performing against that integration plan.

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We don't know what the costs are, we

don't know what the risks are, and

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we have a very high-level assessment

of what the benefits might be.

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And on some of those, there

hasn't been a great deal of proof.

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So Virgin Money deal,

let's put it to one side.

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I just don't know, and that's one of the

reasons why I think members should have

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greater transparency and understanding.

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On your second question, yes, the

principle really matters to me.

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Yeah.

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Which is the spirit of the law suggested

that there should have been a member vote.

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And for me, that's indicative of

the low level of member engagement,

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and we can see that in the number

of people that turn up to the AGM.

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We can see that in terms of the

number of people who vote at the AGM.

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I think the Virgin Money deal basically is

a catalyst for my interest and my concern.

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The reality is, if I'm elected to the

board, we just have to make a good of it.

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We have to do the best job

we can with the integration.

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We can't turn back the clock.

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That's the way I'm approaching this.

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It begs the question of the level

of member information that a

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voting member of the Nationwide...

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I mean, maybe one of the

reasons engagement is so low

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because they're not informed.

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Would you compare the information on how

the performance of the Nationwide to its

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members compared with, say, a listed bank?

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So let's think about

the different intervals.

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Annual accounts are produced

at Nationwide, right?

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Very detailed annual report,

as you'd expect from any PLC.

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Bear in mind, of course, that the

primary legislation that governs building

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societies is the Building Societies

Act of nineteen eighty-six, not the

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Companies Act of two thousand and six.

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So it's different primary

legislation they're operating under.

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But the building societies have regard

to the corporate governance code

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and the principles of, say, Section

one seven two, Duties of Directors

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under the Companies Act, right?

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And they make reference to

that in the annual accounts.

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There's the annual report, which

is, I think, a very standard, market

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standard, I would say, with a PLC in

terms of the depth of information there.

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Obviously, you've got all the

capital requirements, all the

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risk registers, the kind of detail

of the accounting, et cetera.

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And there are interim statements made,

but you don't have the same scrutiny

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as I think you would get with a PLC

having quarterly investor calls and

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the level of transparency and analysis

that goes alongside that by equity

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analysts and other shareholders.

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And I think that's where the

disparity creeps in in terms

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of transparency and scrutiny.

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From my perspective, when I think

about this, Nationwide's takeover of

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Virgin Money and the integration that's

ongoing, I can't think of another

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large retail banking integration

that's been less scrutinized than

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Nationwide buying Virgin Money, right?

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Lee, I think on top of it going, are

we getting- Yes ... synergy benefits?

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What are the- Exactly ... risks?

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And we don't have any of that

as a member looking over the

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shoulder of what Nationwide and

Virgin Money means to members.

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I was wondering whether you were gonna say

you can't remember any being successful,

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but maybe I'm just a bit too- Different

conversation for a different day, perhaps.

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Isn't the wider point that we're

dealing with an institution or a

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set of institutions because this

is the largest of several building

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societies that we have in this country?

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You'll know better than me, there

are smaller number than there used

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to be, but Nationwide is the biggest.

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But it's a bit of an

anachronism, isn't it?

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I mean, didn't Co-op Bank show us that

this model really struggles- I- ... in

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the modern world of banking and finance?

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So I absolutely disagree with that.

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I think mutuals are incredibly relevant

and perhaps more relevant than ever today.

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And I cast my back to writing a report

in two thousand and eight about mutuals.

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Okay.

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And the problem at the time that

the mutual sector was facing was

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the European Union was looking at

mutuals across Europe going, "You

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are a blocker to harmonization.

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You are these domestic champions with lots

of capital that aren't gonna start buying

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things cross-border, and you're gonna

prevent harmonization in Europe, right?"

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A year later, the mutuals are the only

ones that don't need to be bailed out.

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Right.

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Yes.

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Right?

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Okay.

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They are safe, they are secure-

Yeah ... they are conservative.

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But most importantly, and the thing that

always sticks in my mind from writing that

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report with Mark Vile was there was this

classic Oliver Wyman chart, which was a

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XY scatter plot of on the X-axis, what is

the size of the mutual sector expressed as

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a percentage of deposits in that country?

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So you've got some that are very mutual,

that are mighty- France has got quite

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a lot of these mutuals, hasn't it?

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The French do.

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Yeah.

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The Dutch do.

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Yeah.

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'Cause, you know, Rabo.

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The German, you've got the Raiffeisen.

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In Italy, you've got the

Bank Popolari, right?

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When you think about the wider set of what

a mutual is, there's actually quite chunky

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mutuals in those respective countries.

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So that's the X-axis, right?

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So how big is your mutual

sector measured as a percentage

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of deposits in the country?

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On your Y-axis is the number of complaints

to the ombudsman per ten thousand people.

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It is a perfectly inversely

proportional relationship.

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That is to say, the larger that your

mutual sector, the less consumer

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harm there is in that country.

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And the reason is, if your mutual is

owned by its members, the mutual is

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incentivized to do right by its customers.

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There are no profits to be

extorted elsewhere into-

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Yeah ... shareholders' pockets.

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Okay.

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So mutuals do what's right for their

customers by their very model design,

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and as a result, they provide an

important competitive force on the

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rest of the banking sector Thanks

for listening to this episode

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of In the Company of Mavericks.

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The engagement and listener

numbers have grown strongly in

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recent months, which is great.

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Increasingly, my guest recommendations

and introductions have come

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from listeners, people like you.

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If you have anyone you know or follow

that you think would make a good guest

242

on In the Company of Mavericks, then

I'd love to hear from you with the idea

243

or, even better, with the introduction.

244

Please contact me via LinkedIn,

Substack or at jeremymckeown@gmail.com.

245

Even if it's just to say hi, give me

some feedback about the podcast or

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perhaps subjects you might like me

to cover, I'd love to hear from you.

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. So Nationwide is owned by its members.

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What does that actually mean?

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There's a difference between what

it's set up to do in theory and how

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it's exercised in practice, right?

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So the members are the ultimate owners.

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They have voting rights.

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They elect the board, and the

organization should therefore act

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in their collective interests.

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In reality, ownership

is quite diffuse, right?

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You can imagine in the building societies,

associations and the industry group

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that represents the building societies

have this exact chart in the paper

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they write about membership engagement.

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Imagine a pyramid of

member engagement, right?

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At the top of the pyramid, you've

probably got people like me, the

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sad cases that really like dig into

the detail, like really care about

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governance, scrutinize the financial

reports for mistakes, you name it, right?

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They're super engaged.

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They really care.

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They've probably got a level

of skill and experience that

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they can apply to the problem.

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So those are the few people

perhaps at the top of the pyramid.

268

At the base of the pyramid, you have

some people that just don't care.

269

They are customers.

270

It's just another bank to them.

271

They don't really understand

the difference to a building

272

society and a bank perhaps even,

and they're not engaged at all.

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And then you've got clearly flavors

between up and down the pyramid.

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From my perspective, for a mutual to

be vital and to deliver on its purpose,

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you want more engaged, active members.

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But to do that, they need to be informed,

they need to be educated, and they

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actually have to have some choices.

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And this is one of my concerns,

which is there hasn't been a choice

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on the ballot for twenty years.

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There hasn't been an

alternative candidate.

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All you could do as a member is turn up

and say for and against, but there was no

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one you could actually choose for and vote

against to affect a different outcome.

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There were as many candidates as

there were seats on the board.

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That was not how building

societies were set up, right?

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That's why there is a Legal route in

statute for either board-appointed

286

candidates or member-nominated candidates.

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And it's the exercise of that legal

structure and those rights that I think

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is where we've lost our way and where

I'm trying to basically increase the

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level of engagement and democracy to

basically end up with better outcomes.

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If we don't have mutuals behaving like

mutuals, we don't actually have the

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benefit of mutuals being in the economy.

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So presumably, with your attention to

detail, your knowledge of the industry,

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your passionate sense of the benefit

of having a building society, a mutual

294

bank doing good work in our economy,

when you engaged with the board saying,

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"I'd like to become a member director,"

they greeted you with open arms.

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I did not expect this process

to be easy, but I didn't expect

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it to be quite this hard.

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So it's taken a lot of work.

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I was not successful in the first year,

and I can talk about that experience, but

300

I was successful the second year running.

301

Just to get onto the ballot.

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Just to get onto the ballot, let

alone, you know, I feel like I've

303

still got a mountain to climb.

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But as one supporter said, "Yes,

but you've made it to base camp,

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and you can't climb the mountain

unless you get to base camp."

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I like that analogy- Yeah ... 'cause

I think that's exactly right.

307

But yeah, it's been a process.

308

It's been a robust process, I can say

that, but it has not been easy, and I

309

think it could have been made easier.

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So this time last year, or actually

no, a little bit earlier, March of

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last year, March '25, I had a hearing

with the Financial Conduct Authority

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because I'd used a statutory right to

apply for a copy of the member register.

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In the Company's Act, if you're a

shareholder, you can go, "I'd like

314

to inspect the shareholder register.

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I'd like to know who the shareholders are.

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I'd like to be able to contact them."

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The Building Societies Act has a similar

right, but not identical, in that

318

the right in the Building Societies

Act is adjudicated by the regulator.

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So the FCA is now the Mutual

Societies Regulator, and so the FC...

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you apply to the FCA.

321

The FCA writes to the building society

and say, "X wants to access the register.

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What do you say?"

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Building society says, "We object,"

and the FCA then has to decide, and

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e- either party can request a hearing.

325

In this case, both of us did, and

so we had a hearing at the FCA, I

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think the first one in 30 years.

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And you sit down in a room with all

the FCA and their lawyers, all the

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society and their lawyers, and me.

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Right.

330

And turned up with a couple of

scribes, so someone took notes for me.

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And you just basically have the

arguments for and against, and

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then the FCA goes away and decides.

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And in this case, they

declined my application.

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So I was using that to

say, "I'd like to stand.

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I need to get to members, not

only for them to nominate me,

336

but also for them to elect me."

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Yes.

338

And I would like to be able to write

to them or email them to basically say,

339

"This is what I'm doing and why I'm

doing it, and I'd like your support."

340

But that was denied in March of last year.

341

What grounds was your denial made?

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So the legal arguments initially

were, "You can't do this, the

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Data Protection Act," right?

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The reality- Yeah ... Protection Act

comes after the Building Societies

345

Act, and the Data Protection Act

has a very clear clause which

346

says, "If there's a preexisting

legal right, we don't trump that."

347

So I was like, "No, no, this is

not a Data Protection Act issue."

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The argument then became, "Well,

you can have the data, but you won't

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be able to use it because you want

to email people because it's-" Cost

350

effective, and that falls foul of the

Privacy and Electronic Communication

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Regulations, which are basically

there to stop you spamming people.

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To which I said, "I'm not spamming people,

I'm conducting my own household affairs.

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I'm not an organization, I'm not a

company, just a guy who wants to write to

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fellow members under the statute right to

be able to communicate with people to say,

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'Would you nominate and vote for me?'"

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It was interesting that the

FCA took that view from my

357

perspective, because ultimately

the PECR is something for the ICO.

358

It's not- Uh, sorry, p- yeah,

I can't keep up with you.

359

The Information Commissioner's Office.

360

The P- The PECR, the Privacy

Electronic Communication

361

Regulations, which say- Gotcha.

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Yeah ... can you spam people or not?

363

Yeah.

364

And the answer is obviously

not- Yeah ... if you don't

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have their permission to do so.

366

Yeah.

367

But there is a process you could design

which would make it a very clear- Yes.

368

Yeah ... privacy by design process,

and you could abide by the rules.

369

But the FCA basically said, "No."

370

And I was like, "I think that's the

Information Commissioner's Office

371

decision to make- Okay ... if I've

done something wrong after the event-

372

Yes ... not you using it as a reason not

to give me the data in the first place."

373

But they still said no.

374

They still said no, and I appealed,

and then they said, "You can't appeal.

375

You can complain."

376

So I complained.

377

They took eight months, and they

gave me some money for taking

378

a really long time to handle my

complaint, which still said no.

379

So how did you get on the

ballot this time then?

380

A lot of work in using my personal

network, my private network through

381

LinkedIn, through some email lists

that I basically built up over time of

382

people that supported what I was doing.

383

So you still don't have access

to the members' register?

384

I do not have access to the register.

385

No.

386

I haven't applied yet.

387

How many members need to nominate

you to get onto the ballot?

388

To be on the ballot, you

need 250 nominations from

389

qualified two-year members.

390

Now, qualified two-year members is

an interesting test because basically

391

it means you're over 18, you've been

with Nationwide for at least two

392

years, and throughout that period

you have consistently maintained a

393

balance of £200 or more in your current

account, savings accounts or mortgage.

394

So if you've got a

long-term mortgage, i.e.

395

more than two years, you're

probably good to nominate.

396

If you've got a current account,

good luck, 'cause you're likely

397

to have dipped below £200 at

some point in the last two years.

398

Sure.

399

So you have to basically identify

a subset of the members that are

400

actually eligible to nominate.

401

It's a difficult thing.

402

And then to be clear, it's also,

you have to submit paper forms.

403

So I had to submit paper forms from

individual members which gave me their

404

name, their address, their signature.

405

Personally identifiable information you

have to trust a complete stranger with,

406

and I was required to collect all those

as a bundle and deliver them to a society

407

rather than just saying, "Why don't the

members just send it directly to you?

408

There is no reason for me

to see this information.

409

You just need to count

to say they're valid.

410

In fact, we could even

have a digital process.

411

They could do it through your app.

412

Let's make it easy."

413

That request was denied, and so instead

what I'm asking for people to do is

414

deliver a whole load of paperwork to

me, trust me with their data so I can

415

then send it on to their own society to

say I have the requisite nominations.

416

And you have to do it probably more

than you need because a whole bunch

417

will be basically said as they're

invalid or ineligible and they get-

418

So they presumably- ... crossed

out ... they struck a few off

419

the number you- I needed 350.

420

Yeah.

421

I had 256.

422

Okay.

423

So I scraped over the line with

six above the requirement level.

424

And how much of your time in the

last 12 months has this taken you?

425

That's a really good question.

426

I probably haven't been very good

at- Perhaps I should ask your wife.

427

I don't know.

428

She would definitely tell you it's

a lot more than I think it is.

429

I would imagine it's been at least a

day or two a week for the last year.

430

There's been up and downs

in that period, right?

431

There's been some periods where

it's been fallow, and some periods

432

have been incredibly intense because

you have to do it by a certain

433

deadline for the financial year-end.

434

And so, you know, frankly, February

and March was close to sixty,

435

seventy percent of my time on this.

436

So well done for getting to base camp.

437

Thank you.

438

You're on the ballot.

439

Yes.

440

Talk us through the process for those

listening who may be nationwide members.

441

What's the process from here?

442

How do you reach Everest?

443

So to get to base camp, yes, I

have to submit the nominations,

444

the requisite nominations.

445

I also have to submit a deposit check,

five hundred pounds, which I will

446

lose if I do not get sufficient votes.

447

And you also have to submit a election

address, which is, in theory, what

448

will be circulated in the voting pack

to say, "Who are you voting for?"

449

There'll be some blurb about me,

what's my skill and experience,

450

and why am I standing for election.

451

So you have to submit those by

the financial year-end, which

452

is the thirty-first of March.

453

There then begins a process of vetting.

454

So who is James?

455

Is he who he says he is?

456

Is he a criminal or not?

457

Does he have the education that he

states he has, references, et cetera.

458

And then there's also interviews

by the board nomination committee.

459

So I've been interviewed

by five board members.

460

At that point, the board then needs

to go away and decide whether to

461

recommend me or not to the membership.

462

And that has a big bearing in terms

of how I'm probably displayed on the

463

ballot, as well as a separate mechanism

called the quick vote, which when I

464

submitted my nominations and my covering

letter, I said, "Please, can you suspend

465

this in the interest of fairness?"

466

Let me explain why.

467

So at the top of the ballot form, both

in the electronic version you'll get

468

if you get an email to say vote online

or on the paper form, if you still get

469

paper documents, the very first option

on the ballot paper is the quick vote.

470

It is a single checkbox which says, "Your

board recommends that you vote for all

471

resolutions and for each of the candidates

standing for election and re-election.

472

If you're happy with this, simply put

your X in the quick vote box here, then

473

sign and date the declaration below."

474

What that's effectively doing is saying,

"I'm appointing the chair as my proxy

475

to vote as the board recommends."

476

Now, that's not a big deal when

there's no choices on the ballot.

477

But in a year when the first time

in twenty-one years that there'll

478

be an alternative candidate, the

board recommendation and the quick

479

vote could have a material impact

on my likelihood of being elected.

480

Assuming you don't pass

muster with the board.

481

There are three easy scenarios to imagine.

482

Yeah.

483

Board recommended and the quick vote.

484

Board not recommended and the quick vote.

485

Yes.

486

So the first two are either very

positive for me or very negative for me.

487

And then the third, which is suspend

the quick vote, which basically reduces

488

the impact of the board recommendation.

489

So that's what's still to be decided.

490

The board is currently

deliberating on that.

491

They're due to decide later this

month in May, because in early June,

492

ballot papers will start to land in

people's inboxes and post boxes, and

493

people will then have the opportunity

to vote from that point forward until

494

the AGM on the fifteenth of July.

495

So that 15th of July is the day

of the vote, but there's a lot of

496

jockeying for position prior to

that The reality is most people have

497

submitted their votes in advance.

498

Okay, yeah.

499

Very few people vote at the AGM because

there were more people that nominated

500

me this year than attended the 2024 AGM.

501

And this is out of, remind

me, nine million members.

502

So 9.1

503

million members are eligible to vote.

504

670,000 people voted last year.

505

So not very democratic at all, really.

506

Well, it's an interesting

comparison, right?

507

So when I wrote my Times Op-Ed

piece, I drew the comparison with

508

how many votes are cast for the

High Street banks in their AGMs,

509

and therefore, how much of a mandate

do those organizations really have.

510

And if you're a listed PLC, because

it's one vote per share, and you've

511

got lots of institutional shareholders

that vote in large blocks of shares,

512

there is comfortably a greater than

50% mandate for board resolutions.

513

Yeah, as a retail investor, I mean, you

might vote, but you might just think,

514

"Well, I've got bigger investors-"

Professionals, they'll scrutinize it.

515

Yeah.

516

And if, if the board are up to no

good, there are processes in place.

517

There's non-exec directors.

518

It's obviously not foolproof.

519

It, no process is.

520

Yeah.

521

But you've got a layer of protection in

a listed company as a retail investor.

522

Absolutely.

523

Then other people and other

bigger interests are on your side.

524

In y- this case, what you're

saying, you don't have that.

525

So there's 16.4

526

million members.

527

9.1

528

million are eligible to vote.

529

Okay.

530

Only less than 700,000 actually.

531

Yeah.

532

So the mandate is, like, 4%

of the ownership base, right?

533

And of course, of those 4%, circa over

85, 80/90, 95% of them use the quick vote.

534

So the steering of the electorate

via the quick vote is significant.

535

And so from my perspective, I basically

said, "Look, if I'm going to be

536

successfully nominated, I'm gonna p- be on

the ballot, please suspend the quick vote.

537

Make this a fair election," right?

538

This is a way to put that into practice.

539

And have you had a

response on that request?

540

You- No, the board is still deliberating.

541

Okay.

542

So they will decide am

I recommended or not.

543

Will the quick vote be used or not?

544

And there's probably some other key

questions to think about as well.

545

How many board seats are there?

546

The last two people to be successfully

nominated and elected as member-nominated

547

candidates unseated existing board

members seeking re-election because

548

there were N plus one candidates, right?

549

There was one extra candidate

for the number of board seats.

550

And so that's another dynamic that

the board need to think about,

551

which is, do they want to risk a

member-nominated candidate unseating

552

a board-appointed candidate?

553

How many board members are there?

554

I think there will be 11, so nine

seeking re-election, two seeking

555

election for the first time,

having been appointed in the year.

556

And is that a set number,

or can that be a flex?

557

No, I don't think there is a set number.

558

There's obviously corporate governance

code requirements in terms of maximums, I

559

believe, and there is a statutory minimum

stipulated in the Building Societies

560

Act, which I think is only two or three.

561

But I think there is some

flex between those extremes.

562

I want to tell you about a

specialist financial training

563

business called Finance Talking.

564

I know the team there well.

565

Finance Talking's experienced

trainers provide education around

566

capital markets and the basics of

business finance and communications.

567

They offer virtual and in-person training,

as well as a range of low-cost e-learning

568

courses for independent learners.

569

Finance Talking already trains people

for companies such as Rio Tinto, HSBC,

570

Unilever, and Shell, so maybe they

should be training you or your team too.

571

You'll find a link in the episode notes.

572

If you contact them, tell

them that Jeremy sent you.

573

Now back to the episode.

574

What about the credentials?

575

You obviously know what

you're talking about.

576

You've done your homework.

577

What are your credentials?

578

Not anyone can rock up and become a ned

of a public listed company, and NatureWise

579

obviously is not a public listed

company, but it's- Well, it is regulated

580

... it's an important organization.

581

It's regulated.

582

How has that process been conducted?

583

Give us your pitch.

584

Obviously, the betting and interview

process was to look into my skills and

585

my experience, my knowledge of, you

know, governance and regulations, the

586

duties of a board member, et cetera.

587

So I am a member of the

Institute of Board Members.

588

I'm conducting various

training and events with them.

589

My quick CV, I was a dot-com

entrepreneur at school, which

590

paid for university and beer.

591

I went into management consulting

at Oliver Wyman after graduating

592

Oxford with a degree in engineering,

economics, and management.

593

I spent eight years at Oliver Wyman

advising retail banks and building

594

societies on their strategy.

595

I went into industry.

596

I worked for MasterCard for the

large portion of this career,

597

both in a consulting role but then

also in an executive role managing

598

critical national infrastructure.

599

I joined VocaLink at a point it

was being bought by MasterCard.

600

VocaLink runs all of the infrastructure

in the UK for retail payments,

601

so that's Bacs, faster payments,

the LINK ATM network, and the

602

cheque and credit clearing system

for image-based cheque clearing.

603

So critical national infrastructure is

deemed by the National Cybersecurity

604

Centre and an entity that is supervised

by the Bank of England because of its

605

significant importance as a financial

market infrastructure provider.

606

My role at VocaLink was to basically

take the UK IP and help commercialize

607

and operationalize that and around

the rest of the world, which then

608

basically means you're running the

payment systems for national economies

609

in different countries around the world.

610

That's kind of my most

recent financial experience.

611

But also during the time I was

actually between jobs, I was a

612

fintech CEO, so I helped build a

company called Growth Street, which

613

was a FCA-registered business.

614

So I was under the then regime, a

controlled function one, controlled

615

function three, as a director of the

board and a CEO of that business.

616

So I have some familiarity

with Regulation.

617

I have some familiarity with

what it takes to put customers

618

first in a regulated environment.

619

Obviously, with the Vocalink acquisition

by Mastercard, I was front and center on

620

the executive team undergoing a massive

integration of a thousand-person firm

621

into a twenty-thousand-person firm.

622

So hopefully, I've got some relevant

experience that when members read my

623

election address or consider voting

for me, they'll think, "Well, actually,

624

yeah, this guy might have some useful

experience," as well as clearly being, you

625

know, from the membership and being quite

passionate about the future of Nationwide.

626

Sounds like they should appoint

you immediately and not worry

627

about going through all this-

I'm okay with the process, right?

628

... the motions of members.

629

No, no, I'm, I'm- I know you're

being facetious, but democracy

630

is really important here.

631

Of course it is.

632

Yeah, that's very clear, and it was

a facetious comment, but my, uh, sort

633

of the serious point there is sounds

like you should be running the place

634

rather than just as a non-exec director

because you obviously understand the

635

banking industry, the payments industry.

636

That's a pretty damn

impressive CV, if I may say so.

637

Being a non-exec director and being a

non-exec chairman, not of a listed or big

638

company, but smaller companies, you've got

to sit there and help people do their job.

639

You're not doing the job for them.

640

There are different skill sets.

641

I can only imagine the administrative

detail and due process involved in

642

being a director of such a large

organization of Nationwide or any

643

other company of similar size.

644

I've no direct experience, but I do

know as an investor and observer of

645

these things, it's a critical role.

646

Being a NED is different

from being an exec, clearly.

647

It's a non-executive role, right?

648

This is about governance.

649

This is about holding the organization to

account, holding management to account.

650

I think a non-executive director

should be a critical friend.

651

It should be someone that- Yes ... is

supporting the growth of the organization,

652

supporting it in its strategic aims,

but asking the difficult questions

653

to make sure that things are running

the way that they should be run.

654

I have no desire to be an

executive at Nationwide, right?

655

I've left that part of my career.

656

I think it's now clearly over.

657

I do hope that I have something to

contribute in a non-executive capacity

658

that can bring some of my executive

experience to those conversations, and

659

that's the way I would approach it.

660

It's a bit like being a

parent in some ways, isn't it?

661

You can't run your kid's life for them.

662

You have to know that you're

there when they need you, and

663

being a critical friend, I think,

is a good way of summing it up.

664

You also, in that context, have to

have some form of vision, some form of

665

direction of travel for the organization

that you're legally responsible for.

666

What, in your view, is

that future for Nationwide?

667

So Nationwide has a strategy.

668

It has four pillars, and I don't

disagree with those statements.

669

Being a beacon for mutual good

is one of the four, and I think

670

the interesting question there

is what does that mean, right?

671

Being a modern mutual, how should that be

done from a member governance perspective?

672

That's the part that I look at and think

I have something to contribute there based

673

on what I think that means, what other

members have told me what they think that

674

means, and their support of my campaign.

675

I want to be very clear, right?

676

I want Nationwide to be a mutual.

677

I want it to maintain

being a building society.

678

I want it to basically act as close to the

line on what a mutual means as possible.

679

Because as we mentioned earlier, right,

having a strong mutual in a market

680

doesn't necessarily mean it's just

good for the customers of that mutual.

681

It's good for everybody.

682

We'll all end up with better products,

better service, better prices if there

683

is a mutual in the market keeping

the publicly listed banks honest.

684

That's the line that I

want Nationwide to walk.

685

I think a lot of people look at

someone like me doing what I'm

686

doing and have it with a nineteen

nineties lens, 'cause that was the

687

last time this was really happening.

688

Yes.

689

And they think carpetbaggers

and wanting to demutualize-

690

Yeah ... all this kind of stuff.

691

Absolutely not.

692

No.

693

Okay.

694

It's not in my interest whatsoever,

and the board have been very clear

695

that is not their interest either.

696

Also, let's go one step further, recognize

that since nineteen ninety-seven,

697

Nationwide has this thing called the

charitable assignment, which says,

698

"If at any event, for whatever reason,

we demutualized, if you remember post

699

ninety-seven, that money goes to charity."

700

So the incentive isn't even there.

701

What I think is important is that

mutuals are held accountable, and my

702

concern creeps in when mutuals behave

like banks but are not being held

703

accountable- Yeah ... like banks.

704

Sure.

705

It falls between two stools.

706

Just one random thought I had when

you were talking about the way it

707

presents its results and updates its

members and communicates with its

708

members and makes its potential member

director go and collect physical forms

709

and jump through all those hoops.

710

What about a members' webinar on issues

of the day on, you said there's only a

711

few hundred people turn up to the AGM.

712

Well, is there an online option?

713

Do they have webinars of- You've

hit another one of my pet peeves.

714

So Nationwide has a virtual only AGM.

715

It is the only building site in

the country that is virtual- Okay

716

only.

717

Okay.

718

Every other one you can turn up in person.

719

Some of them are hybrid, so you can turn

up online and in person, and we were

720

talking about PLCs and democracy earlier.

721

I was delighted to see that BP lost that

resolution recently because BP went to

722

its shareholder and said, "We want to do

virtual only AGMs," and it was rejected.

723

And I think it's really important

that we have the ability to

724

turn up in person unfiltered.

725

Yes.

726

To basically queue in front of the

microphone- Yeah ... and say your piece,

727

and not only have that question put to

the board and the CEO or whoever else is

728

there, but also for the other members to

hear the question and react to the answer.

729

Because if it's done in a way like we're

doing this podcast, you're in a little

730

tiny virtual room, and you don't get

line of sight to all the other questions

731

people asked, how the board has decided

to prioritize the list of questions and

732

run out of time for the ones that are-

Yeah ... you don't have that transparency,

733

and I think that is a big mistake.

734

I think you're onto your question now,

but I had to correct you on that because,

735

yes- Yes ... Nationwide has a virtual AGM.

736

It has had online access to the AGM, I

think, since the year two thousand, but

737

it's only recently that it's decided that

virtual only is the way forward, and it's

738

something that I have a problem with.

739

But how do you get those sixteen

million members, those nine million

740

voting members- Yeah ... more engaged?

741

I think the problem that we have, if

I come back to my pyramid analogy, is

742

that you have the Annual reports once

a year, which is something that really

743

interested members, really engaged member

to ask questions, form questions for the

744

AGM, which may or may not be answered.

745

And that's a single one-year event, and

that's the only thing that I can think of

746

as a member owner where you can go deep.

747

The rest of the year, I think all the

communication is for the base of the

748

pyramid, which is some nice fluffy

headlines that sound good, but if you

749

want to scratch the surface, you cannot.

750

There is nothing in between.

751

You know, we talked about PLCs

having quarterly reports and analyst

752

calls and all the rest of it.

753

That facility does not

exist at Nationwide, right?

754

It exists perhaps in bond holders,

but I don't see a place where I, as a

755

member equity owner, can participate

outside of the annual general meeting.

756

Nationwide runs a panel called

Member Voice, which is something you

757

can opt into, which is effectively

the market research, so running

758

surveys and things like that.

759

But the types of thing you're describing,

which is kind of more town halls

760

frequently throughout the year, other

ways that members can congregate,

761

I don't think they exist at all.

762

And there used to be things like talk

back events and things like that in the

763

past, but one of the principal problems

I had with getting the nominations was,

764

how do I go and find other members?

765

You could go to a branch-

Hang, hang out around branches.

766

Well, that's it.

767

And I tried it.

768

Who goes to branches anymore?

769

But I tried it, and exactly that.

770

Like two things.

771

One, who goes to branches these days?

772

And second of all, who is happy

to talk about money on the

773

high street with a stranger?

774

Yes.

775

They basically look at you,

think you're, you're a guy with a

776

clipboard, you must be a chugger.

777

Yes.

778

I actually do not want to talk to you.

779

And I understand that.

780

But if you take away a physical AGM,

if you take away any other ability to

781

meet with members during the year, how

can anybody, without being incredibly

782

digitally savvy or having a very powerful

personal network, do what I've done?

783

Obviously, your focus is on getting from

base camp with Nationwide, but what's

784

the wider issue here in terms of other

neutrals, other building societies in

785

the UK and the democratic deficit, as

I think you've called it at Nationwide?

786

So democratic deficit was

The Guardian's terminology.

787

Sorry.

788

That wasn't my phrase.

789

But I understand why they said it,

because you've got a number of issues.

790

You've got virtual-only AGMs, you've

got non-binding votes on executive pay.

791

Why is that allowed?

792

Just because building societies aren't

part of the Companies Act doesn't

793

mean that I don't think there should

be binding votes on executive pay.

794

You've got a lack of member-nominated

directors on the board.

795

That last one seems to be a

particularly building society problem.

796

So if you're a occupational pension

fund of a certain size, by law, one

797

third of the board seats- Yes ... go to

member-nominated trustees or directors.

798

If you're the cooperative group, not

the bank, but the actual supermarkets,

799

et cetera, four of the board members

are member-nominated directors.

800

One of them is currently

sitting as the interim CEO

801

after the CEO had to step down.

802

And you look at that and you think,

"This looks like a particularly building

803

society problem now," and yet the right

is enshrined in law for members to

804

nominate their own director for election.

805

So why has this happened?

806

I think it's extremely hard, right?

807

It takes a lot of work, and I think a

lot of people might be put off from that.

808

But I think the building societies could

help meet candidates halfway on this.

809

There are things I think that could

be improved, but if they wanted

810

to encourage more members to put

themselves forward, they could do that

811

It takes a certain degree of skill and

experience that we mentioned before.

812

You would have to pass muster with

regulators, you have to be fit and proper.

813

But you are one member on a board

of ten, 12 people, so I don't see a

814

great deal of harm in having a direct

member voice represented there,

815

even if they don't necessarily have

exactly the same depth of experience

816

as other professional board members.

817

The 250 nominations is a high bar, and

it actually varies from 50 to 250 based

818

on the size of the building society.

819

But that number was made five times harder

820

So there was an amendment to the

Building Societies Act to say,

821

"We want to make member governance

activities five times harder."

822

Five times harder to nominate a

director, five times harder to bring a

823

resolution to the AGM, five times harder

to ask for a special general meeting.

824

And I think it was a classic

case of closing the stable door

825

after the horse had bolted.

826

It was post the demutualization

wave, and I think the government

827

at the time said, "You know what?

828

Mutuals are important.

829

We shouldn't let any further

demutualizations happen.

830

Let's make it a lot harder

to make this happen."

831

So in what way was it five times harder?

832

It raised, so for me, to

getting 250 nominations.

833

Yeah.

834

That number used to be 50.

835

Okay.

836

To call a special general

meeting, that number is 500.

837

It used to be 100.

838

So- That's because people like you in

839

the- People not like me- ... champions

of mu- ... who were carpetbaggers.

840

Yeah, sorry.

841

People doing what you're doing now.

842

Correct.

843

And so- ... I think that there's just

been this increase in the hurdle, which

844

has, I think, made it largely impossible

for most people to do what I'm doing.

845

It's cut these organizations off from

the connection with their membership,

846

and therefore, some of the hoops that

you've had to jump through and still

847

remain in your path are not deliberately

put there by the people who are already

848

on the board of Nationwide, for example.

849

No.

850

But other things like

the quick vote have been.

851

It'll be the acid test for you, isn't it?

852

There's been a real boiling frog-

Yes ... problem in my mind, right?

853

Bit by bit the rules

have been changed, right?

854

So that there was some statutory

855

rules have been changed over time.

856

I use the word on my blog, debased, right?

857

It has debased the membership to a degree.

858

Yeah, of course.

859

It's made it a less vital

concept, and it's made member

860

governance much, much harder.

861

James, I've learnt a lot.

862

I've really enjoyed our conversation.

863

Let's just be very clear at the

end here, what can listeners do to

864

support your cause for achieving the

goal that you're campaigning for?

865

Just set out the timetable

and what the deliverables are.

866

Sure.

867

So my message is simple.

868

If you're a member, you're an

owner, please use your vote.

869

You will start receiving ballots

in early to mid-June, either

870

by post or in your email.

871

That will be the opportunity for you to

vote, and that window is from that time

872

in June all the way through until the

date of the AGM on the 15th of July.

873

In fact, you can even turn up

to the AGM itself and cast your

874

vote if you've not been able to

cast it previous to that time.

875

So please exercise your vote.

876

There is choice on the ballot this year.

877

I would really recommend that

more members are engaged.

878

And if you're not a member of Nationwide,

but you're a member of different

879

building society, please think similarly.

880

Please think about exercising your vote.

881

If members don't hold the board to

account, there is a real risk that

882

the mutuals don't act and behave like

mutuals, and we need them to do that

883

to hold the bigger banks to account.

884

You've made that case very clear,

so thanks very much, and hopefully

885

we can deliver some ticks in boxes

or whatever it is you're being

886

asked to do to help you on your way.

887

So thanks so much for talking

today, and I'm gonna follow your

888

progress with great interest.

889

I'm not a Nationwide member, but

you've definitely made me think

890

about the importance of mutuals

in general, but particularly

891

in finance in a different way.

892

Thank you.

893

I've really enjoyed the conversation.

894

If people want to learn more about

me, more than happy to find me on

895

social media, but my website is

perhaps the most comprehensive.

896

Um, I don't know if that can be added

in the show notes, but if it can-

897

I'll definitely will add that, yeah

... James digit four nationwide.co.uk.

898

Okay.

899

Good luck.

900

Thank you very much, Jeremy.

901

It's been a pleasure.

902

Here are a few things to take

away from this conversation.

903

First, mutuals matter, and not just

for the people who bank with them.

904

The evidence is clear that a

strong mutual sector keeps the

905

wider banking market honest and

makes our financial system safer.

906

Second, Nationwide has

a democratic deficit.

907

Less than four percent of eligible

members vote, and a single quick vote

908

tick box steers most of those votes

straight to the board's recommendation.

909

Whether the board suspends the

quick vote this year will tell you

910

everything about how seriously they

take the idea of member democracy.

911

Third, this isn't about demutualization.

912

James very much wants Nationwide to remain

a mutual, but crucially, he wants them

913

to walk the walk and behave like one.

914

He's done his homework, and from what

I can tell, he is eminently qualified.

915

Ballots land in June.

916

The AGM is on July fifteenth.

917

If you're a Nationwide

member, you're an owner.

918

Use your vote.

919

You can learn more about James's campaign

at James number four nationwide.co.uk,

920

linked in the notes below.

921

If this episode made you think, please

share it with someone who banks with

922

Nationwide and ask questions about

how member director nominations

923

work at your building society.

924

If you're still listening, you might

like what I post on Substack, where I

925

write hypernormal times, all one word,

and post other content for subscribers.

926

I dive a bit deeper into the

financial world we inhabit and

927

attempt some joined up thinking about

how we investors might gain fresh

928

insights into what it all means.

929

Please check it out and subscribe.

930

It only takes a few seconds.

931

Thanks for listening, and hope

to see you over there soon.

932

Brought to you by Progressive Equity.