Nationwide ballot

Milarky

Does anyone have access to the precise breakdown of the failed demutualisation ballot result - on 23 July 1998 - by Nationwide?

Googling this has revealed this extract (originally in the Telegraph, some time later):

Members last voted on whether or not the society should keep its mutual status or convert and pay out windfalls in 1998, when 1.1m wanted Nationwide to convert into a bank, but 1.13m voted for the society to stay mutual. However, nearly 3m people did not vote at all.

http://www.dooyoo.co.uk/bank/nationwide-building-society/337964/

...a bit more googling has turned up that actual 'result':

The margin was just [33,700] in favour of mutuality with more than two million members voting. Some 1,135,587 members voted against conversion, while 1,101,887 voted for.

Nationwide chairman Charles Nunneley said that those who wanted a conversion had fallen significantly short of what would be needed for a formal conversion vote. The board had a mandate "to continue with our building society strategy, providing long term value to our members and competition and diversity in the financial marketplace."

http://news.bbc.co.uk/1/hi/business/the_company_file/138184.stm

The result, as you can see was 'wafer thin' at just 33,700. Granted there needed to be a 'supermajority' of a 75 percent vote in favour for that resolution to be carried anyway, but my friend thinks he heard talk shortly thereafter that the chairman had cast his proxy votes (assumed to be something over 30,000) against the resolution. If the Nationwide Board had secured less than 50 percent of member support amongst the non proxy ballots then they were heading to a technical (but not a legal) defeat. That would have been dynamite. Two questions then:

Where there actually more 'YES' votes than 'NO' votes cast by members?

[Look at the language used by the chairman: It's a bit equivocal by only mentioning that the vote had fallen short of the 'required' margin (of 75%)]

Would it be 'correct' procedure for a chairman to cast proxy votes against the majority - with the intention, or effect, of reversing the result?

Thanks

M

ReportInvestor

You are correct in your assumption about proxy votes.

And if you recall the ballot boxes in the branches were open to staff to tamper with. Quite apart from the "help" given at the counter to half the grannies in the country with filling out their form.

And the ballot was "extended" by a few days (presumably in order to achieve the "right" result).

In a neat irony, the architect of the Nationwide defence was Communication's Director Mike Lazenby.

As the now Chief Executive of Kent Reliance, Lazneby has stirred up the pot by removing his society's "charitable assignment" clause and also by declaring the the country doesn't need more than 3 or 4 building societies :eek:. He is now the "black sheep" rather than the hero of the mutual fold.

Personally I think the proxy vote issue is not a big one. Which way did the members who assigned their vote to Charles Nunneley expect him to go? It's not as if he hadn't made his position crystal clear :rolleyes:.

The real issue was the almost unlimited scope for underhand, undemocratic practices at branch level, tacitly approved by senior management.

But by such deviant tactics, a strong and thriving mutual was saved for the nation - even if proper accountability was a casualty.

It's not a black & white world. All's fair in love and mutuality :rolleyes: and this was a war zone with no Red Cross to police it.