Nationwide CEO: A progressive business agenda is no barrier to success
The boss of the world’s largest building society, Nationwide’s Joe Garner, has called on the financial services industry to adopt a more cooperative approach to leadership if the sector is to regain trust among the British public.
Joe Garner, the Chief Executive Office of Nationwide, said the industry could learn from the model used by mutual organisations in helping to redress the sector’s negative perception following the financial crisis.
“In a world where what divides us seems more prominent than what unites us, I believe that mutuality has a real relevance today. I personally believe that it is still true that we can achieve more together than any individual can on their own,” Mr Garner began.
Delivering his key note speech, ‘Leading for Mutual Value’, in the Attlee Suite at Portcullis House at an event hosted by the think-tank New City Agenda, Mr Garner said that for the first time a whole generation is looking to the future with “less confidence than their parents”.
He argued that polarised attitudes towards globalisation are damaging our society, while more than ever people are opting to “pull drawbridges up”.
Individuals feel like they are losing out in a capitalist system others are profiting from, he added, while perceptions remain that the fruits of business success are not shared equally.
“On top of that, there have been some very clear failures of leadership: phone hacking, the financial crisis, cheat devices in cars. Perhaps all of this is why an alternative narrative has emerged, one lead by the idea that perhaps we’re better off on our own,” he continued.
“Perhaps more significantly, technology amplifies all of this. Threats are actually further away than ever, but technology makes them feel closer to home.”
The CEO argued that, to address these deep-rooted problems, the banking industry can learn from mutuality in four broad areas: on governance, ownership, purpose and leadership.
Mr Garner, who joined Nationwide in April 2016, reflected that mutuals are obliged to take a long-term view in the interests of their members rather than take short-term reactionary decisions.
And while strong leadership is required to make tough choices, it is not solely in the gift of those at the top, he continued, and also requires a demonstration of care for those members in order to retain trust.
Mr Garner said that mutuals continue to serve a social purpose, citing examples of Nationwide’s role in helping first-time buyers get on the housing ladder and its work in supporting customers most at risk.
“At the heart of our organisation lies the belief that people can achieve more together than on their own. Our members and our business have flourished through collaboration and cooperation. As we look around today, at a world hovering between competition and collaboration, between drawbridge up, and drawbridge down, there are real choices about how we take our society and economy forward,” he said.
“If we are to make sure that business benefits everyone, perhaps we could pay more attention to purpose and leadership. Perhaps to rekindle an out of fashion kind of leadership, one that’s strong and determined yet one that also cares.
“At Nationwide, we don’t get everything right. And we won’t get everything right in the future. We too face the threats of cyber and the challenges of competition, the potential and the potential disruption of technology. But our aim throughout is to use our influence and purpose to drive better outcomes for all of society, whether it’s making homes affordable for 20-somethings, supporting people through hard times, or showing that a progressive business agenda is no barrier to success, we truly believe we can achieve more together than we can alone.”
During a question and answer session, Omar Ali, UK financial services leader at Ernst & Young, asked what more policy makers could do to address the challenges facing the housing sector and support institutions such as Nationwide.
Garner said there is no way around the fact that the key issue in housing is about supply.
“That is at the core of it. If we look back through history, the only time the supply has broadly kept pace or run ahead of demand, was at a time when public sector and private sector have both been firing on all cylinders,” he argued.
“We’ve seen some announcements recently”,
but Garner argued that representatives from house-building, lending policymakers must “get around the table” to thrash out solutions to the UK’s housing shortage, starting with how to build more homes.
“We need a big step change in supply to get anywhere near moving this materially,” he said.