Key facts
- Nationwide customer James Sherwin-Smith failed in his attempt to join the building society's board.
- Sherwin-Smith received 12.5% of the vote, significantly less than the 50% required.
- The Nationwide board had advised members to vote against his candidacy.
- Sherwin-Smith plans to launch a new campaign for democratic reforms and will seek election again in 2027.
- He aims to trigger a special general meeting to reform rules, including ending the 'quick vote' system.
James Sherwin-Smith, a Nationwide customer, has vowed to continue his campaign for greater democracy at the building society after failing to secure a seat on its board. At the company's annual general meeting on Wednesday, Sherwin-Smith garnered approximately 12.5% of the vote, representing support from 75,939 members. This fell significantly short of the 50% threshold required to become the first customer to join the 142-year-old institution's board in nearly 25 years.
The board had recommended members vote against Sherwin-Smith, citing his lack of experience to direct a £368bn lender. This recommendation was bundled into a 'quick vote' option, which the majority of members typically use. Last year, 87% of votes were cast via this system.
Despite the setback, Sherwin-Smith stated he would not be deterred and is launching a fresh campaign to agitate for change, arguing that Nationwide has drifted from its democratic ethos. He announced plans to stand again at the 2027 AGM and is immediately seeking member nominations, offering to share his learnings with other potential candidates. Building societies, owned by their members, are among the few UK sectors that legally allow customers to nominate individuals for board elections, though no member-nominated directors currently sit on any of Britain's 42 building society boards.
Sherwin-Smith also intends to initiate a campaign to trigger a special general meeting focused on reforming Nationwide's rules. Key proposals include ending the 'quick vote' system, ensuring at least two board members are nominated by members, and introducing binding votes on executive pay, similar to shareholder-owned companies. The meeting would also call for the reinstatement of hybrid AGMs, moving away from the current online-only format, and granting members a meaningful vote on major strategic decisions to prevent controversies like the £2.9bn takeover of Virgin Money.
During the AGM, Nationwide executives faced numerous questions regarding governance, executive pay, and the board election process. The board's recommendation to approve the pay report, which included nearly doubling Chief Executive Debbie Crosbie's pay to £4.7m, received about 95% support. Sherwin-Smith commented that the question is no longer whether Nationwide's governance should evolve, but how quickly members desire that evolution, stating his intention to help members answer this in the coming year. Nationwide reported its highest AGM attendance in 15 years, with the board's recommendations receiving overwhelming support.