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This year's Annual General Meeting (AGM) was held on Thursday 23 July at our Head Office in West Bromwich. However, in light of the Coronavirus outbreak and government guidance on social distancing and public meetings, it was not possible for the Meeting to go ahead in the usual way. This meant the AGM was a closed meeting and members were not invited to attend.
View the resultsAlthough we had to deliver our AGM differently this year, we wanted to make sure that members still had the opportunity to ask the Society's Board of Directors questions. Below we have published the answers to the most commonly asked questions:
How will you be running the AGM this year? Why aren’t you providing a live stream of your AGM? What other opportunities will there be for members to engage with the Society?
This year’s AGM
Each year the Society welcomes and seeks to encourage the participation of as many of its members as possible in its AGM. We appreciate that it is an important opportunity to speak with members and hear their views. However, the restrictions due to the Coronavirus meant that it was not be possible to provide this opportunity in the usual way this year.
This meant our AGM was a closed meeting as we did not invite members to attend this year, as our priority was protecting the health and safety of both our members and colleagues.
Although it wasn’t possible for members to attend in person, members still had the opportunity to participate by voting online or returning their voting form in the post. Also, members were still able to ask the Society’s Board of Directors questions by sending them by email, via our website or by post.
Online live streaming of the AGM
We are aware that some other building societies have begun to provide a live stream of their AGM. However, our understanding is that these meetings are not virtual and members are not able to actively participate. This would also be the case for the Society as under our Memorandum and Rules we are required to hold a physical AGM meeting.
The Society has begun investigating the merits of providing a live stream of our AGMs and how this might be delivered. However, the current restrictions mean that access to the Society’s Head Office is limited and would make investigative work to identify our requirements in conjunction with an external web platform contractor challenging.
However, we will continue to investigate options that may benefit members, including the live streaming of future AGMs and any associated changes to the Society’s Memorandum and Rules that may need to be considered.
Opportunities for members to engage with the Society
The Society places a high value on member engagement and is actively looking at holding a member event in the future which will provide the opportunity for members to interact with the Society and share their views. As soon as we are able to confirm when the event will take place, which will be subject to the government’s guidance allowing us to do so, we will advise members.
Mutuality
Other than its charity and voluntary work, is the West Brom a genuine mutual society?
The principles of mutuality have guided and shaped the West Brom since we were first formed, and this goes beyond the important community and charity work we do. As a traditional building society, we are not here to drive profit at any cost. We act in the best interests of our membership as a whole, which means profits made are reinvested back into the Society for the benefit of members now and in the future. A good illustration of this is the safe and good returns we have been able to offer our savers by paying an average rate of interest 49%1 above that paid by market.
This ethos enables us to achieve our Purpose and be reflective of what a building society should be - an organisation that provides safe, good returns through our savings products and promotes home ownership through responsible mortgage lending. Overall, our mutuality means we are here to support to the financial wellbeing of members.
1 Average market rates sourced from Bank of England Bankstats table A6.1.
Remuneration
In light of the impact of COVID-19 on the Society, how did the Remuneration Committee come to the decision regarding Executive Directors’ performance awards this year?
It was important that the Remuneration Committee (the Committee) took into account all factors when making decisions regarding the 2019/20 performance awards, which this year included the consequences of the unprecedented COVID-19 pandemic, and its impact on the Society.
As you will see in the Remuneration Report, the performance-related pay (PRP) for the Executive Directors is assessed based on the Society’s overall performance and their own individual contribution. A range of objectives and measures are used including financial results, customer service, delivery of key projects (change), risk management and people leadership to assess what level of PRP should be awarded. These targets are detailed in the Remuneration Report.
The Society’s performance, driven by the Executive Directors, and their own individual contribution was strong across the majority of these objectives. COVID-19 impacted results in the very last couple of weeks of the financial year and it did directly impact on profitability. This was because the Society had to increase its provisions for bad debt given the potential economic consequences of the pandemic. Such provisions relate to the ‘legacy book’ of business, inherited by the current Executive which to date has been very successfully managed down.
The impact on financial results was fully reflected in the calculation of the PRP and reduced the amount the Executive Directors received, relative to what they would have been paid, had COVID-19 not occurred during the 2019/2020 financial year.
The Committee considered whether to exercise its discretion and reduce/not grant any PRP award. They felt this was unfair for a number of reasons:
The Committee also sought independent external advice to ensure its decision to pay PRP was fair when considering all stakeholders. Their decisions reflect the advice they received.
It is worth noting that this year 92.12% of members who voted, voted in favour of the Remuneration Report and 91.67% in favour of the Remuneration Policy. These are the highest percentages voting in favour for over a decade. Also, we are the first Building Society to introduce a binding vote on the Remuneration Policy which we put to the member vote at least every three years or when changes to the Policy are proposed.
Digital transformation
You talk about the importance of enhancing your digital capabilities. In light of COVID-19 can you offer any insight or examples of how you helped members?
The Society has been able to support member access during the COVID-19 pandemic to accommodate the social distancing and self isolation guidelines as well as supporting members who have had difficulty visiting one of our branches. We have enhanced our services to enable members to complete their financial transactions safely such as our chat service on our website to enable the instruction and processing of electronic transfer of funds, online forms to allow members to nominate a ‘trusted individual’ to access essential funds on their behalf when self isolation/restrictions are being followed and an online application process for mortgage payment holidays.
Digital investment is a key focus for the Society. Prior to the COVID-19 pandemic, the Society had already embarked on a programme to update our core savings platform and introduce, over the next two years, new features that will enhance our digital capability which will offer our members greater choice and flexibility in how they can open and operate their savings accounts. However, we also understand that many of our members still value being able to talk to us face-to-face or over the phone and so we are working to integrate all of our channels to offer the best possible customer experience.
