Online-only AGMs and disenfranchising members

As the National Trust prepares to take its AGM fully online in 2026, online-only AGMs are also becoming a feature of the corporate world. Paul Jackson argues in Investors’ Chronicle that virtual meetings may be cheaper and easier for the management, but can ultimately lead to worse outcomes for the business.

Virtual-only AGMs are certainly easier to manage, especially if questions have to be submitted in advance. But would awkward questions then be avoided? There is, though, another reason why company directors need to be brought face to face with individual shareholders. It can break them out of their silos.

If they give waffling responses to apparently off-the-wall questions, maybe they should question their assumptions. They might hear personal stories about the impact their businesses are having on everyday lives. Or be asked probing questions that make them stop and think.

Virtual-only AGMs are an easy solution, but they’re not the right answer. Company managements need to hear what shareholders have to say. Their businesses will be the stronger for it.

We know that building societies have for years been undermining member democracy with the use of the Quick Vote in AGM elections, a practice more recently taken up by the National Trust to sideline members. Find out more from the Building Societies Members’ Association.

Now the management of the Nationwide Building Society is alienating the members by blocking the election of candidates not of its own choosing from the board. Does all that sound familiar? In the run-up to the Nationwide’s AGM on 25 July 2025, Ben Marlow writes in the Daily Telegraph,

Who said banking was boring? One glance at Nationwide’s website and you might wonder if you were in the company of some crusading NGO on the cusp of saving the planet.

“We are not a bank, built to make money for shareholders. We are … a mutual, owned by and run for the benefit of our members”, it proudly states.

“There’s no one else quite like us.”

It surely doesn’t need pointing out that if you’re going to join the sanctimonious crowd and act like a paragon of virtue then you definitely need to walk the walk. Yet Nationwide is rapidly turning into a world-beater in hollow soundbites.

The Nationwide model is a simple one. The concept of democracy is absolutely core to mutual status – when it comes to major strategic moves or matters of genuine consequence, its 16 million members are supposed to have a say. Without that, it instantly loses its USP and becomes just another self-interested organisation out to make a quick profit at all costs.

Unfortunately, Nationwide’s members are quickly learning that despite management endlessly shouting about its principled ways, this supposedly ethical approach appears increasingly to be built on flimsy foundations.

The latest example of Nationwide’s readiness to ride roughshod over the will of its members comes in the form of what should have been a fairly routine board re-election vote at its annual general meeting. But it is in danger of spiralling into another embarrassing storm for the organisation.

Members – not unfairly – point out that of the 13 board members up for re-election, none of them have been nominated by them. They are also concerned that there aren’t enough directors with the experience of running a mutual.

With all 13 directors up for re-election and not a single one of them nominated by members, one empathises entirely when Sherwin-Smith says: “It’s unclear to members where the representation for us is. It feels to us that the board is doing what the board wants, not what the members want.”

If a row over the re-election of directors was its only misdemeanour, Nationwide would be entitled to feel hard done by perhaps. Yet such episodes are starting to become the norm rather than the exception to the extent that it is beginning to look like it is not being run for the benefit of members.

This, after all, is a board currently trying to see off an entirely justified backlash over a bumper £7m pay award for chief executive Debbie Crosbie that wouldn’t look out of place at some of the big investment banks.