Skipton Building Society has misunderstood the actions of its members in seeing the outcome of its annual general meeting as a support of mutuality, according to Cairngorm Asset Management, a company that invests in demutualising building societies.
Euan Rae, investment director at the company, said: “Skipton seems to have chosen to interpret the re-election of some of their directors as support for retaining mutuality. The Cairngorm Building Societies investment trusts and the Demutualisation investment trust voted to re-elect directors as a constructive notion, having also voted that they should consider demutualising.
“Building societies must consider regularly whether conversion is in the best interests of its members. It was disappointing the directors, elected by members, did not believe that the overwhelming vote supporting the motion to consider demutualisation should have led them to consider demutualisation.”
Chelsea, also threatened by demutualisation, has just held its AGM and has adopted a similar stance to Skipton. Both AGMs included votes on the two members’ resolutions put forward by Carpetbagger.com. The principal resolution put forward by the carpet-baggers called on the board to consider conversion or takeover.
Some 90% of Skipton members and 93% of Chelsea members voted in favour of the resolution.
While the outcome looks like an endorsement at conversion, both societies said that they encouraged members to back the resolution on the basis that the boards consider the ongoing status of the societies on a yearly basis. Both are also saying that members’ belief in mutual status was emphasised by their decision to re-elect the pro-mutual directors, despite the carpet-baggers urging members to vote against the directors.
Darren Stevens, spokesman at Chelsea, said: “We are seeing this as a pro-mutual vote. We made it clear to our members what the vote was about and a large majority voted in favour of the directors.”
Some 88% of Chelsea members voted to re-elect the board, compared with more than 90% of Skipton members.
Mark Smitheringale, head of corporate communications at Skipton, said: “The carpet-baggers were encouraged to vote against the re-election of the directors. But we had an all-time record number of members voting and an all-time record of people voting for re-election. Our members clearly believe that our strategy for success is working.”
The society is to conduct a review of its mutual status in the third quarter.