Thank you to our members who voted in our Annual General Meeting, which took place on Monday 22 July. This year over 7,000 members voted, with all resolutions duly passed and the election and re-election of all directors approved. You can see the voting results below.
The votes cast for and against the resolutions were as follows:
| No. | Resolution | Votes For | Votes Against | Votes Withheld | % For |
| 1 | To receive the Annual Report and Accounts for the year ended 31 March 2024 | 7,582 | 22 | 22 | 99.71% |
| 2 | To approve the Report on Directors’ Remuneration | 7,318 | 245 | 60 | 96.76% |
| 3 | To approve the re-appointment of Deloitte LLP as Auditors of the Society | 7,493 | 92 | 41 | 98.79% |
| 4a. | To re-elect Jacqueline Arnold | 7,487 | 100 | 37 | 98.68% |
| 4b. | To re-elect Anna Barsby | 7,476 | 105 | 43 | 98.61% |
| 4c. | To re-elect Victoria Jane Bruce | 7,496 | 81 | 47 | 98.93% |
| 4d. | To re-elect Richard Bryan Ellison | 7,473 | 104 | 47 | 98.63% |
| 4e. | To re-elect Kelli McKechnie Fairbrother | 7,482 | 97 | 45 | 98.72% |
| 4f. | To re-elect Patrick Desmond Moore | 7,467 | 106 | 50 | 98.60% |
| 4g. | To re-elect Mark John Stanger | 7,470 | 107 | 47 | 98.59% |
| 5 | To elect Hamish Cameron Galbraith Marr | 7,452 | 102 | 70 | 98.65% |
All resolutions were duly passed: Ordinary Resolutions 1-5, receiving over 50% of the votes cast in favour. A vote withheld is not a vote in law and is not counted in the calculation of the proportion of the votes for and against the resolution.
The Society committed to donate £2 for every vote cast to FareShare Cumbria & Lancashire. The total number of eligible votes cast was 7,626. The Society will, therefore, donate the sum of £15,252 to FareShare Cumbria & Lancashire.
You can watch the 2024 Annual General Meeting below.
When recruiting for senior positions and Board members, we are always guided by mutualism and our business values. We are committed to equality and diversity, but we acknowledge that there is always more we can do.
This year we announced that Jackie Arnold will become our new Board Chair and she is the first woman in our history to hold the position. This will take place following this meeting. Additionally, the Society is a signatory to the Women in Finance Charter and in September 2023 we were one of only 28 signatories to meet our target of 50% representation at a senior level ahead of our deadline.
In terms of ethnic and professional diversity, the Society strives to recruit from these backgrounds where possible, whilst ensuring compliance with the Corporate Governance Code in recruiting people with the necessary skills and expertise in finance and banking. When recruiting for new Board members, we look to ensure that diversity of thought is at the forefront of any new appointment.
This year we launched our Belonging Strategy which is underpinned by a three-year action plan which aims for us to continue to build a culture of belonging where our people have opportunity, visibility and voice.
You can find more details of our commitment and efforts to increase diversity in the Nomination and Governance Committee and the People, Remuneration and Culture Committee reports in the Annual Report and Accounts, available on our website.
The Society is committed to good corporate governance. The Corporate Governance Code states that a director will not be independent if they have served on the Board for more than 9 years. Therefore, this is the maximum period a Board member can sit on the Board. The most effective Boards balance the benefits of long serving members who enhance corporate memory and build strategic stability and the benefits of fresh thinking. There have been 5 new non-executives in the last 3 years and we don’t believe a shorter standard tenure would enhance either Board dynamics or governance.
When recruiting, the Society considers whether individuals have the necessary skills and expertise in finance and banking as well as other key areas including technology and risk. This ensures that every member of the Board can offer a different perspective.
The People, Remuneration & Culture Committee reviews remuneration at all levels of the business, and approves the bonus structure for Executive Directors. We must pay a rate that is reflective of the market to ensure we recruit the appropriate people, and in order to effectively run the business for the maximum benefit of our members. You can find details of our commitment to fair and appropriate remuneration for all people in the People, Remuneration and Culture Committee report in the Annual Report and Accounts available on our website.
The increase in basic remuneration for directors in 2023-24 was 4%, which was also awarded to all permanent employees. For non-executive directors, who are paid fees, these increased by the same amount.
The People, Remuneration and Culture Committee reviews remuneration at all levels of the business. This year the increase in basic remuneration for all permanent employees was 4%. Additionally, in April 2024 all employees that are basic rate taxpayers received an additional one off payment of £600.
The Board and PARC undertook a review of the executive pay arrangement, including consideration of the appropriate balance between salary or fixed pay and pay based performance, and how we link performance related pay to the achievement of the longer-term objectives of the Society and the significance of the planned transformation programme.
As a result, a new discretionary element of remuneration, called an LTIP, has been introduced with the support of third party remuneration consultants from KPMG. The purpose of LTIP is to incentivise delivery of performance over the long term. The Board have determined that the delivery of the whole business transformation plan was best supported by introduction of an LTIP provided to executive directors, members of the Senior Leadership Team and a small number of other employees.
It has been designed as a tool for retention of a high performing team and as a mechanism that will align reward to delivery of both the whole business transformation and growth over the period of strategy execution.
The Society has kept a close eye on the level of arrears over this period of high inflation and the increases in interest rates which a growing proportion of our borrowers have faced. The table on page 9 of the Annual Review illustrates the increase in both FSRP and FSOL 90 days+ arrears over the last year as described in the paragraph above however this represents a very small percentage of the Society’s overall book supporting the assertion that arrears remain low.
Yes – this is covered extensively in the Chief Financial Officer’s review on page 55 and 56 but also pages 57-59. There are several factors contributing to the difference in profit when compared to the previous financial year which are outlined in the Summary Financial Statement. One of the main factors was a significant charge (of £7.5m) from our hedging activities which reversed some of the hedging gains (of £14.1m) in 2023 Our expectation that this would occur was highlighted in last years results. If we removed this large fair value hedging loss and last years gain as we do in our operating profit metric, then the operating profit for this financial year was £27.4m compared to £21.2m the previous year. Other factors include increasing our peoples wages and growth in the amount spent on transformation.
Delivering straight forward digital is one of our five strategic priorities and has been for a number of years. Over the last year we have successfully upgraded our infrastructure underlying our core banking platform which will support our future transformation.
This year, we have also successfully completed a second round of work with suppliers and progressed into detailed commercial negotiations with our preferred technology partners. This summer we expect to sign initial commercial agreements and move into the detailed discovery phase of work before entering into the build phase in the second half of the coming year.
Our transformation programme will make our systems more robust and resilient and enable the incremental and fast rollout of new products and services including the ability for new customers to open savings accounts online and allow people outside our operating area to access the banking services we offer. For our current account customers improvements in our digital app offering including Confirmation of Payee have been made this spring and summer but we recognise that we have more to do and this will be delivered as part of our transformation.
The Society is proud to support the communities which we are a part of; especially through the Kinder Kind of Kitchen initiative with FareShare, and we have chosen this year to further that support by donating £2 for every AGM vote we receive. We understand that individuals may object to this, however, we believe it is the right thing to do and is aligned with our values.
The integrity and impartiality of our external auditors is one of the key considerations for the Board. In order to minimise risk, we follow the UK Corporate Governance Code. This states that we should retain the same auditors for no longer than a 20 year period and undertake a re-tendering process after 10 years.
In 2023, the Society carried out the 10 year re-tendering process and you can read about it in our Annual Report and Accounts. Ultimately, it was decided that Deloitte continued to offer the best approach for the Society, and they would continue to act as the Society’s auditors. A key factor in this decision was the outcomes of the Financial Reporting Council’s reviews of Deloitte’s audit quality and their sustained lead versus a number of other comparable firms in this regard.
You can find more details of the Board’s policies on the retention of external statutory auditors in the Audit Committee report, in the Annual Report and Accounts, available on our website.
At present we do not have any plans for a merger or to demutualise, and the primary drive behind our digital transformation is to ensure that the Society will still be here in another 170 years. If the situation did ever change, which is not envisaged at this point, we will always act in the best interests of our members.
We are committed to supporting our members and providing banking services in a way that our customers want to use them. You’ll always be able to speak to a real person when you come to us. We have been proud to keep our branches open in communities where other providers have been closing theirs. Our flagship English Street branch is reopening this year, which will allow us to provide a centralised service to our members in the heart of Carlisle.
The Society is looking forward to re-opening English Street and being able to welcome our customers to experience our branch of the future, and we will share more details on this soon. We have been proud to keep our branches open in communities where other providers have been closing theirs and we continue to be committed to supporting our members and providing banking services in a way that customers want to use them. You’ll always be able to speak to a real person when you come to use and we have several branches open in the Carlisle area.
The Society’s ATMs are operated by a third-party supplier who unfortunately does not offer mini-statements from the ATM. If you have internet banking, you will be able to view and download your statements.
Our specialist third-party supplier who we use to produce chequebooks went into Administration at the end of December 2023. Whilst we were working to find and establish an alternative supplier, there was a delay in issuing new and replacement chequebooks to our customers.
We are working through the backlog of any outstanding chequebooks which will be complete in the coming weeks and we apologise to customers who were affected by a delay in receiving a new chequebook during this time.
As a building society we are committed to placing our members at the centre of everything we do. This is partly achieved through responsible and prudent lending that is delivered within our risk appetite and by offering products and services which appeal to our members. We regularly assess the products and services which are offered to ensure that they are fit for purpose.
Most building societies limit their activities to the provision of mortgages and savings accounts however we also provide current accounts for individuals and local businesses as well as commercial loans to the hospitality and tourism sectors.
We are currently looking to the future with our transformation programme involving a substantial technology offering which will make our systems more robust and enable a fast rollout of new products and services.
Over recent years, the banking regulator’s requirements in respect of opening new charity & clubs/society accounts have become more stringent, particularly in relation to money laundering and identification. In light of this, we can only continue to provide existing charity & clubs/society accounts to those that meet a specified criteria. We have also had to stop opening new charity & clubs/society accounts as we work through meeting those regulatory requirements in an effective and efficient way. We are disappointed that we aren’t able to help those charities & clubs/society accounts that wish to bank with us at this time and we are regularly reviewing this position.
All employees of the Society have to complete prescribed training including Anti-Money Laundering, Fraud Awareness and Payment Card Industry Awareness. Additionally, all customer facing colleagues including branch staff and Customer Care have training tailored to their roles.