All businesses have owners. It may be just one person i.e. a sole trader, or thousands even millions of people e.g. the shareowners of a public limited company.
All businesses also need decision-makers. Decisions may be strategic e.g. about the long-term aims of the business and its general direction. They may also be more mundane and practical e.g. should we be open on a Sunday? Sometimes the owners make all these decisions or reserve only the most vital ones for themselves and delegate the others to managers.
In the financial world, leading organisations continue to debate the key issues of ownership and control, vision and purpose. Over the past 20 years, many of the 'leading players' among the financial institutions have asked themselves "What do we exist to do? What should our future purpose be? How well suited to our aims is our present structure of ownership, management and decision-makers?"
These are big, searching questions. To answer them, an organisation must have a clear vision of its key purpose and a commitment to fulfil it. It must then ensure that its ownership structure is in tune with its key purpose.
Over the past 20 years, many large building societies have abandoned mutual ownership and have become public limited companies. They have done this in order to diversify their activities and to compete more directly with banks and other financial institutions.
Nationwide is a mutual organisation owned by its members and remains so by choice. Whilst retaining its mutual state, it has restated its vision: 'to grow Nationwide in a more sustainable way, actively managing our social and environmental impact as well as valuing our members and employees'.
Nationwide has adopted a distinctive position designed to show its members and others that its responsibilities as a building society go beyond simply pursuing commercial interests. This Case Study examines why Nationwide has taken this stance and how it is successfully pursuing its aims.