James Sherwin-Smith, a Nationwide customer seeking to influence the governance of Britain’s largest building society, has failed in his bid to secure a seat on the mutual’s board. At Nationwide’s annual general meeting held yesterday, 87.5 percent of voting members opposed Sherwin-Smith’s candidacy, while approximately 12.5 percent, representing nearly 76,000 members, supported him. This support fell well short of the majority required for election.

Nationwide had advised its members to vote against Sherwin-Smith, citing concerns over his suitability for the role. The society argued that the former management consultant lacked the necessary skills and experience to contribute effectively to the board of one of the UK’s largest lenders. Around 532,000 members voted against him, among the approximately nine million eligible to participate.

Despite the defeat, Sherwin-Smith said he intends to contest the election again next year. In addition, he announced plans to launch a campaign aimed at compelling Nationwide to convene a special general meeting to consider a series of governance reforms. Sherwin-Smith needs the backing of at least 500 members to call such a meeting. His proposals include granting members greater influence over major strategic decisions—such as acquisitions—and introducing binding votes on executive remuneration, measures intended to enhance member rights and mutual accountability.

Among Sherwin-Smith’s criticisms has been the fact that members were not consulted on Nationwide’s £2.9 billion acquisition of Virgin Money two years ago. The board, led by Chief Executive Dame Debbie Crosbie, argued that the deal was in members’ interests but did not offer them a vote on the transaction. The takeover has continued to fuel debate among members about the balance of power within the mutual.

The issue of executive pay was also a focal point at the annual meeting. Crosbie’s remuneration package rose to £4.7 million for the year ending March 2024, nearly doubling from the previous year’s £2.5 million. Some members voiced strong criticism of the pay increase, with one describing it as “obscenely large.” In response, Tracey Graham, Nationwide’s senior independent director, defended the society’s approach to executive compensation, stating that the board has struck an appropriate balance in its judgments.

Sherwin-Smith’s candidacy was notable as the first member-nominated attempt to join Nationwide’s board in 21 years. He met the society’s threshold for ballot eligibility by securing at least 250 nominations from fellow customers. However, it has been even longer since such a candidate was successfully elected, underscoring the challenges faced by nominees from within the membership ranks. The campaign was marked by tension, with Sherwin-Smith alleging that the board’s management of the voting process disadvantaged him.