Is it Fair to Criticise Nationwide Building Society Directors?

“Your” Nationwide Building Society directors are often criticised by the media and by members of the society for being money grabbing fat-cats whose only interest is in lining their own pockets with as much of members’ money as they can possibly get away with.

However just because the directors help themselves to ever-larger amounts of members’  money every year does not mean that they are not putting members’ interests first.

Just because the amount of members’ money they take goes up when the society’s savings interest rates go down does not mean that they are not putting members’ interests first.

Just because the chief executive takes enough of members’ money to pay for about 15 Chancellors of the Exchequer does not mean that he is not putting members’ interests first. You have to understand that he is only being paid the rate for the job. You have to realise how large the funds are and how complex the processes are for a building society compared to the simple workings of the economy of the whole of the United Kingdom. To put it another way the chief executive of Nationwide Building Society is capable of, single-handedly, running the economies of 15 countries like the United Kingdom.

You may have read that the chairman stated that the chief executive is unable to manage, in 2011, on his present £1.9 million (he also has another job so is not full-time) and will be taking another £125,000 of members’ money (or one could say another Chancellor’s worth) in basic pay in the coming year. Please do not criticise the chief executive for this after all he has clearly demonstrated that he doesn’t really need the money. He gave up over £300,000 (that is 2 Chancellor’s worth) that the chairman was trying to force upon him in 2012. But he has to get it back somehow and it is a mutual society so the increase will also help to pave the way for the increases that all the other directors, particularly the chairman, will take. That is what is meant by mutuality.

Just because the Chairman only works a few days a year and takes twice as much money as a full time Chancellor of the Exchequer does not mean that he is not putting members’ interests first. It is not the Chairman’s fault that he is overpaid by so much and is taking another £50,000 of members’ money this year to add to his £250,000. The reason the chairman only works a few days a year is obvious. If he were to work full time at the same rate there might be little money left in the society. So obviously he is putting members’ interests first.

Just because directors will never reveal how it is that bonuses are so easily earned or what directors’ have actually done to earn them does not mean that they are not open and honest.

The reason why the directors do not wish members to know what they have actually done to earn their bonuses is because they are concerned that members may well suffer with shock or high blood pressure or even a heart attack if they were told. Obviously the directors’ first thoughts are for the well being of members. Clearly they do not want to cause members any suffering by such revelations.

Many members wonder why bonuses are needed at all for directors to do their jobs properly. But just think of what sort of state the society would be in if bonuses were not paid. Obviously there are many things that directors would refuse to do. If only Chancellors were paid bonuses this country would have no financial problems whatsoever.

Of course directors are thinking of members’ interests all the time. They think about them so much they just want more and more members. Just think how much the ex-members of the Portman Building Society benefited from that takeover.

The directors have stated quite clearly in their publicity campaign “members are our focus”. It is most important to remember that everything the directors do is for the sole benefit of the members of the society. For instance when the society was fined £1 million by the FSA for lack of security in its systems the directors put members’ interests first and passed the fine on to them.

Many members get the impression that the Remuneration Committee is the most important part of the business of the society because so much emphasis is placed upon it, so much of the directors’ time is spent on it and because directors’ pay is so much better than anything else about the society. Again this is not true. At every meeting of the Remuneration Committee the directors’ thoughts are focused entirely on members’ interests.

It is rumoured that there is another committee just like the Remuneration Committee that is devoted entirely to the interests of members and is attended by every director. It is believed it was set up specifically to ensure that the interests of members are always at the top of every boardroom meeting agenda. It is called the “Members Are Our Focus Committee” and meets for about five nanoseconds every decade. But it is believed that directors do not like to publicise its existence just in case other societies try to copy this unique Nationwide Building Society boardroom innovation.

Most members say that the ballot paper with its infamous “Quick Vote” is appallingly biased, corrupt and anti-democratic. But the only reason the directors want it is because they are putting the interests of members first. They simply wish to save members so much wasted time reading through all those resolution thingies and putting in all those silly little crosses on the voting form when they serve absolutely no purpose whatsoever. This shows that the directors are very very considerate people.

The society has around 15 million members. Just because over 14 million of them do not support any of the resolutions does not mean that the directors should be criticised.

Please ignore all those nasty jibes you may hear about gravy trains and snouts in the trough. Just remember the directors are not fat-cats who hate mutuality, it is just that they are simply misunderstood. So please do not criticise the directors they always put members’ interests first – after themselves.

It is also important to remember that the society is a mutual organisation, which means that it has no shareholders, and therefore the society is owned by the directors, run by the directors for the benefit of the directors.