James Sherwin-Smith is mounting a challenge that no Nationwide member has successfully attempted in 25 years, seeking a seat on the building society’s board ahead of its annual general meeting.
Sherwin-Smith has identified transparency as his central concern, pointing to the £2.9bn Virgin Money takeover as a catalyst for his boardroom bid.
Speaking on a podcast, he said: “If this was a PLC, I think the equity analysts would be pouring over the details of this… I can’t think of another retail bank integration of this scale in recent times that has been less scrutinised.”
Nationwide members were not permitted a vote on the Virgin Money acquisition, a decision that drew significant criticism and raised persistent questions around the mutual’s accountability to its 16 million members.
Sherwin-Smith has also highlighted the de-banking of Michael Armstrong, a vocal critic of the Virgin Money deal, as another example of the communication breakdown he believes has taken hold within the organisation.
He argues Nationwide’s structure compounds the issue, noting it remains the only building society in the country that does not allow members to physically attend its AGM, limiting their ability to organise collectively.
Labour MP Navendu Mishra has sent a letter to Nationwide chair Kevin Parry, expressing concern over how executives have been communicating with members, adding political pressure to the situation.
Mishra sent a similar letter to Chancellor Rachel Reeves, who named Nationwide chief executive Debbie Crosbie her Women in Finance Champion last December, creating an awkward moment for the government.
Crosbie’s £7m pay packet has drawn criticism, with Sherwin-Smith taking issue with the philosophy of, as he puts it: “pay us like bankers but don’t hold us accountable like bankers.”
Crosbie has declined to endorse Sherwin-Smith’s candidacy, saying the matter was one for the board, on which she sits, following the publication of the firm’s annual report.
Members are offered a so-called Quick Vote option for all board-recommended candidates at the AGM, effectively acting as a digital rubber stamp for management decisions.
Sherwin-Smith has not yet received confirmation on whether the board will endorse his candidacy or suspend the Quick Vote option to allow a fair election, with seven weeks remaining before the meeting.
Separately, Starling Bank’s latest annual report revealed a modest profit dip of around three per cent, driven primarily by declining interest rates across the market.
By contrast, rival neobank Monzo saw its interest income grow 39 per cent to £1.2bn over the same period, highlighting a divergence in performance between the two digital lenders.
Starling attributed part of its profit decline to a £20m investment in Engine, its software-as-a-service arm, which brought in just under £11m in revenue, up 24.5 per cent following a 284 per cent surge the previous year.
Chief executive Raman Bhatia said in the aftermath of the annual report that Starling was looking to create its next “unicorn” with Engine, signalling the division’s growing strategic importance to the group.
Controlled account closures also weighed on Starling’s customer acquisition numbers, with the bank saying the move deliberately constrained short-term growth as it managed its existing portfolio.
With retail banking margins under pressure from falling rates and competition intensifying, Engine appears set to become an increasingly central driver of Starling’s long-term growth ambitions.