Yorkshire Building Society’s vice president faces calls to resign over his role Sale of fellow member-owned firm LV = to a US private equity buyer, amid concerns that it could start a wave of demonetisation.
Gareth Thomas, chairman of the all-party parliamentary group for reciprocity, said there were serious questions about Alison Hutchinson’s position on the building society’s board while pursuing the sale of another large client-owned firm.
In addition to his role as Vice President of Yorkshire, Hutchinson is a non-executive director on the board of LV=. £530m to the 178-year-old firm owned by its members. I supported the sale of Bain Capital1.1 million members of the insurer, formerly known as Liverpool Victoria, will vote on Friday to withdraw the deal.
Thomas said it was unacceptable for Hutchinson to sit on the board of one reciprocal while telling members of another that the customer-owned position was not in his best interest.
“She’s got a private equity background, has strongly supported the monetization of LV, and will be a cause for concern for Yorkshire clients if she stays on their board and continues to be chairman. So I think she has to take this step.” Should be in position. Should give up, step down and give in to someone who is truly committed to mutual territory, step up instead.”
Yorkshire is one of the UK’s largest financial mutuals, with approximately 3 million clients and approximately £50bn in assets, including ownership of Norwich and Peterborough and the Chelsea Building Society. The firm proudly promotes its mutual position, arguing that unlike major banks it does not have enough shareholders to satisfy and is run for the benefit of its members.
Hutchinson joined the board in 2015 and became Vice President and Senior Independent Director in October 2020. She is the chief executive of Pennies, a charity that provides technology to round-up retail sales to donate to good causes. She was previously chief executive of specialist mortgage provider Kensington Group, and is an independent director of private equity firm Foresight Group.
A Yorkshire spokesman said he values Hutchinson’s role on the board for his business insights. “LV’s proposals do not affect our business – these are changes that are being voted on this weekend. When it comes to our own status as a construction society – we are quite clear that we do not We are not going to do demonetisation in this situation. It is not on our agenda as a business.”
Thomas said he was concerned sales of LV=could trigger a wave of demonetisation similar to the 1990s when construction societies broke deep ties with their customers in pursuit of growth. This 2008 ended in financial crisis, when debt-ridden ex-mutuals like HBOS and Northern Rock collapsed or survived with a multi-billion-pound taxpayer bailout.
“Distress Showed” [demutualisation] It was not in the long term interest of the customers,” he said. “It helped make banks much bigger and more vulnerable. There is hope that this is not a second round of demonetisation as customers and the British economy will be lost again. ,
Harrow West’s Labor and Co-Operation MP said LV=’s board was “far from transparent” about their plans, warning that its sale would make the market for pensions and insurance far less diversified. “LV = one of the biggest players in the market and [the sale to Bain Capital] There will be an open invitation for private equity companies to target other mutuals,” he said.
An LV=spokesperson provided a quote to the Guardian from a letter sent to MP in July: “The decision to recommend a transaction with Bain Capital was the unanimous conclusion of the Board and was driven by our primary focus that has always been. ” What is in the best interest of the members. This was followed by a comprehensive and rigorous strategic review supported by financial, legal and actuarial advisors. The procedure and criteria used were shared with the regulators.”