VOTE now! Proposed take over of Virgin Money - Nationwide members should be given a vote

Section62

badmemory said:

gt94sss2 said:

badmemory said:

 There have been some comments about it ceasing to be a mutual but that they really cannot do without a vote of those that are entitled to vote on that issue.  Which are long term members only.  

I'm not sure that is correct.

All members would be able to vote on demutalisation but only the longer ones would be eligible for shares etc. 

Though Nationwide did once say if they decided to change status, they would give newer members their share as well..

Yes you are correct sorry about that.  However every new member does sign to say they agree to NOT getting a share if they change status.  So that could prove interesting.  However if they do demutalise I would take my cut & then all my money, which will obviously impact them seriously (I wish).  Apart from anything else it would be unsafe to leave all the money with them that they have at present.

Nationwide - through their '(un)fairer share' - have demonstrated they can decide to give any amount of money to any members they wish, and they don't need a member vote to approve it.  So let's say for the purposes of discussion that Nationwide had sufficient cash to give each excluded member the same amount of money as those who were members prior to the charitable assignment - such that all members would get a windfall regardless of status.  So how might a demutualisation vote go then?

I'd invite anyone who might disagree to point to what in the legislation or rules of the society prevents that hypothetical situation happening if it were something the Board believed was in the interests of the membership.

This is one of the reasons why I'm uncomfortable with the idea that big decisions can be made with very little consultation and no need for members to vote. The Board and senior management team currently have a worrying level of freedom to act, and do so whilst the rules neuter the membership's ability to hold them to account.

badmemory

The reason for the original agreement was to avoid new members joining just to ensure demutualisation.  Changing the voting regulations may change the outcome of the vote but the only ones who would suffer from the outcome of that vote would be the charities that were due to be the recipients.  I have no idea how much impact they would have on that if any.  If they do have any then knowing charities I would expect the reaction to be strong & a bit loud.

masonic

badmemory said:

The reason for the original agreement was to avoid new members joining just to ensure demutualisation.  Changing the voting regulations may change the outcome of the vote but the only ones who would suffer from the outcome of that vote would be the charities that were due to be the recipients.  I have no idea how much impact they would have on that if any.  If they do have any then knowing charities I would expect the reaction to be strong & a bit loud.

If I've understood correctly, the suggestion was that both charities and members would get their share. Assigning members would be compensated as a separate undertaking.

Foxhouse

Is it me, or is this beginning to sound like some carpetbaggers are trying to be clever and using this as an excuse to change the charitable assignment situation by changing the Society's rules? Forgive my mild paranoia on this, but those chancers have left me with some bitter memories.

WillPS

Foxhouse said:

Is it me, or is this beginning to sound like some carpetbaggers are trying to be clever and using this as an excuse to change the charitable assignment situation by changing the Society's rules? Forgive my mild paranoia on this, but those chancers have left me with some bitter memories.

Yes, the masks are slipping again. 

masonic

WillPS said:

Foxhouse said:

Is it me, or is this beginning to sound like some carpetbaggers are trying to be clever and using this as an excuse to change the charitable assignment situation by changing the Society's rules? Forgive my mild paranoia on this, but those chancers have left me with some bitter memories.

Yes, the masks are slipping again. 

I don't think Section62 or anyone else contributing to this thread has designs of getting themselves onto the board of Nationwide to ram through such a change. Even if so, it would likely be just as futile as attempting to change the rules via a petition or motion at a GM, as they'd need to get elected and find a majority within the board for such a plan first of all.

The board is already using the prospect of increased (un)fairer share payments as a carrot to members for this acquisition (future payments will be higher), so doesn't that suggest they'd do the same for anything else they wish to drive through that may have limited support?

The fact they've started distributing profits instead of reinvesting them to the benefit of the society is going to entice the very people who would vote for anything for a suitable payout. If there had been a campaign opposing (un)fairer share, I'd have been all over that. Use the money to make your products better Nationwide!

boingy

masonic said:

The fact they've started distributing profits instead of reinvesting them to the benefit of the society is going to entice the very people who would vote for anything for a suitable payout. If there had been a campaign opposing (un)fairer share, I'd have been all over that. Use the money to make your products better Nationwide!

Or they could try making the Fairer Share, you know, fairer. 

WillPS

masonic said:

I don't think Section62 or anyone else contributing to this thread has designs of getting themselves onto the board of Nationwide to ram through such a change. Even if so, it would likely be just as futile as attempting to change the rules via a petition or motion at a GM, as they'd need to get elected and find a majority within the board for such a plan first of all.

Agree; but that's not the same as willing others to disrupt the business to achieve the same aim.

masonic said:

The board is already using the prospect of increased (un)fairer share payments as a carrot to members for this acquisition (future payments will be higher), so doesn't that suggest they'd do the same for anything else they wish to drive through that may have limited support?

The fact they've started distributing profits instead of reinvesting them to the benefit of the society is going to entice the very people who would vote for anything for a suitable payout. If there had been a campaign opposing (un)fairer share, I'd have been all over that. Use the money to make your products better Nationwide!

Also agree, it would have been good to see Nationwide look to the membership at AGM to consider whether further payments should be made or products further improved. I'd totally support a vote on those lines - genuinely not entirely sure how I'd vote in those circumstances but I think I know the outcome, and it would have been useful to guide the society moving forwards.

This is all stuff which the society could do at its leisure. The same cannot be said of a corporate takeover.

Section62

masonic said:

WillPS said:

Foxhouse said:

Is it me, or is this beginning to sound like some carpetbaggers are trying to be clever and using this as an excuse to change the charitable assignment situation by changing the Society's rules? Forgive my mild paranoia on this, but those chancers have left me with some bitter memories.

Yes, the masks are slipping again. 

I don't think Section62 or anyone else contributing to this thread has designs of getting themselves onto the board of Nationwide to ram through such a change. Even if so, it would likely be just as futile as attempting to change the rules via a petition or motion at a GM, as they'd need to get elected and find a majority within the board for such a plan first of all.

Yes, if those with an unhealthy obsession with other forum member's motives could see beyond their own prejudices and actually read what people are saying, rather than inventing their own interpretation which has to involve carpetbagging, then we might have an understanding that the potential risk to Nationwide's mutuality could come from within.  The rules make it very difficult to attack mutuality from without, but do nothing to stop it from within.

Those that resort to the carpetbagging theme on a regular basis seem to have a total blind spot when it comes to seeing where the real risk to mutuality might lie.

I want Nationwide to be more democratic to lessen that risk.

masonic said:

The board is already using the prospect of increased (un)fairer share payments as a carrot to members for this acquisition (future payments will be higher), so doesn't that suggest they'd do the same for anything else they wish to drive through that may have limited support?

The fact they've started distributing profits instead of reinvesting them to the benefit of the society is going to entice the very people who would vote for anything for a suitable payout. If there had been a campaign opposing (un)fairer share, I'd have been all over that. Use the money to make your products better Nationwide!

Exactly.  We were told fairer share was about distributing some unexpected left-over money.  Now the growth and overall strategy of Nationwide is being shaped to create funds to maintain or increase the (un)fairer share. That is a fundamental departure from the traditional mutual building society model and is all being done without a member vote.

If the Board proposed an update to the memorandum and rules and consulted on a plan/strategy for this new model I would probably be happy to vote for it.  But without vital safeguards and properly reflecting the mutual ethos (e.g. showing respect for equality of membership, to some degree) then it isn't something I can support.

I agree wholeheartedly with Nationwide using the money to make their products better.  If they had better products they could grow the business without needing to take on the baggage that VM will bring with it.

But still the same folks will point a finger and shout "Carpetbagger!".

Section62

badmemory said:

The reason for the original agreement was to avoid new members joining just to ensure demutualisation.  Changing the voting regulations may change the outcome of the vote but the only ones who would suffer from the outcome of that vote would be the charities that were due to be the recipients.  I have no idea how much impact they would have on that if any.  If they do have any then knowing charities I would expect the reaction to be strong & a bit loud.

There aren't charities that are "due to be the recipients".  There is the Nationwide Foundtion which is a charity, and that would decide what to do with the money.  The Foundation is already the recipient of donations from Nationwide (e.g. a lump sum from the 1%).  The only organisation which has a claim to be disadvantaged if the assignment was bypassed would be the Foundation.  It isn't unrealistic in a hypothetical case that the acquiring business agrees to continue the 1% (based on the 'Nationwide' profits) donation, plus part of the deal could give the Foundation a lump sum.

If Nationwide doesn't demutualise then the Foundation doesn't get anything other than the funding it currently does.

So a scenario in which the Foundation gets a big lump sum and a promise to have ongoing annual funding could lead the Foundation's Board to recommend that a deal in which they get quite considerable funding is better than maintaining the status quo in which they get significantly less.

So who would "suffer"?

Legally the function of the assignment isn't to generate a vast sum of money for charities, it is there to prevent disruption to the business.  The potential benefit to charities was/is a side product of stopping demutualisation.

The wider charity sector could complain that the Foundation not getting the full benefit they could has an adverse impact on charities that might be funded otherwise, but I don't see what avenue they would have for legal challenge if both Boards considered it in the interests of members and beneficiaries to do so.

That would be the same "trust the Board to make the right decisions" argument which is currently being used to support the takeover (without a vote).

The rules and assignment as they stand give the Boards considerable wriggle room if a demutualisation proposal came from within.  Again, the focus is on stopping an outside/hostile attack, not stopping the Nationwide Board proposing demutualisation if they thought it was a good idea.