Candidate Challenges Nationwide Over Election Process
James Sherwin-Smith, a customer seeking election to the board of Nationwide Building Society, has accused the lender of "unfair" treatment and undermining democratic governance after the society announced it would advise members to vote against his candidacy.
He stated that Nationwide had created an uneven playing field by confirming it would offer members a default "quick vote" option that included a vote opposing his election at the annual meeting scheduled for July.
Background on Nationwide and Board Representation
Nationwide, the United Kingdom's largest building society, is mutually owned by its member-customers. The last member to serve on Nationwide’s board retired in 2002. Sherwin-Smith argues that having a member on the board would enhance accountability within the lender amid ongoing scrutiny.
However, Kevin Parry, Nationwide’s chair, issued a statement on Thursday asserting that "his election would not be in the best interests of the society" due to Sherwin-Smith lacking the necessary experience. Nationwide currently serves 17 million members and manages assets exceeding £377 billion.
Candidate's Response to Board's Position
Sherwin-Smith responded to the board's stance, saying:
"They have skewed this massively against me and they’ve also attacked me on my suitability for the board."
The quick vote option is presented to all Nationwide members as a convenient way to follow the board’s recommendations. In the previous year, 87% of approximately 670,000 votes cast utilized this quick-vote system, indicating that Sherwin-Smith faces significant challenges in informing members about the alternative voting options available.
Concerns Over Voting Process and Governance
Sherwin-Smith described the decision to make a vote against him the default as a "dangerous precedent for mutuals and democratic governance." This follows a recent warning from Labour MP Navendu Mishra about governance issues across the building society sector.
Additionally, Sherwin-Smith claims that Nationwide has prevented him from modifying election materials to inform members that they should avoid using the quick vote if they wish to support his candidacy.
Candidate's Qualifications and Campaign Update
In rebuttal to Nationwide’s criticism regarding his experience, Sherwin-Smith highlighted his professional background, including his tenure as an executive at the payments company Vocalink and his work as a management consultant at Oliver Wyman, specializing in retail banking.
In a campaign update, Sherwin-Smith stated:
"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."
Board Chair's Statement on Election and Candidate Assessment
Kevin Parry commented:
"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."
