Podcast Summary
160th AGM Podcast Summary
Hello, and welcome to a very special Saffron podcast. I'm Zoë Neville-Smith, the Society's communications officer. Saffron recently held its AGM, which, as well as being a requirement of Saffron's governance, gives Saffron's board an insight in to members' wants, needs and perceptions of the Society.
The AGM is also an opportunity for members to meet the Society's directors and put questions to them. Putting a face to a name can be quite reassuring, and helps build on Saffron's ethos of delivering a more personal touch.
The purpose of this podcast, therefore, is not only to go over the questions and answers given at the AGM, but to introduce some of the people you'd have met if you'd been able to come along!
I'd like to start by introducing Sara Andrews, our Society Secretary. She oversees the formal aspects of the AGM, such as the initial mailing inviting members to attend, and all of the procedures around the member vote. Hi Sara.
Hello Zoë.
Welcome to your first podcast! I wanted to start with you because you're the best person to explain why Saffron holds an Annual General Meeting, who can attend, and why voting is important. First of all, what is the purpose of the meeting?
The AGM takes place within 4 months of the year end, and follows the official publication of Saffron's accounts for the previous year. Every member is entitled to a copy of the accounts and can bring any questions that they may have regarding the figures to the AGM.
How is a 'member' defined?
A member is anyone with a mortgage with us, or a savings account with a balance of over £100 at year-end - in this case, 31st December 2009. You also have to be over 18 to have voting rights.
What do our members vote on?
Each year we ask members to vote to receive the Report & Accounts, appoint our auditors, and to approve the directors who's board membership is about to begin or is up for renewal. This year, all Directors standing for board membership were elected to the board with over 90% approval for each.
I understand that the member vote represents a key aspect of Saffron's governance, is that right?
Ultimately we are accountable to our members, so yes, we go to them on a yearly basis to check that we're still operating in accordance with their wishes. We accept votes online and by post to make it easy for members to have their say. If there is an important Society issue to be resolved, such as when we changed our name in 2006, that would be voted on at the AGM as well.
So voting isn't always as simple as this years' process?
Not always, but even when it's around straightforward governance issues, we make a donation for every vote cast. This year we are donating £1850 to Great Ormond Street Hospital on the basis of the votes we received.
That's great! So well worth voting. Thanks for that Sara.
I'm now going to speak to Podcast Veteran, our Chief Executive Andy Golding. Andy, was it a good AGM for you?
Hi Zoë. Yes, I always enjoy the opportunity to talk to our members face-to-face. As you've said, it's the personal touch that matters so much to our members, and I'm very grateful to those that came.
We had a few questions from members, some of which were pretty challenging. First of all, there was a question about Directors' pay. Obviously the remuneration of Saffron's directors is published openly in the report and accounts, so, especially after such a challenging year, it's no surprise that members will ask questions about the salary and bonuses awarded to Executive directors.
Absolutely; the papers are full of apparent 'exposés' on how much the heads of many organisations are paid. There was also a recent piece in the Mail on Sunday inciting members to question the pay of their building society's chief executive. I'm pleased to say though, that that article encouraged Saffron's members to vote in favour of Saffron's remuneration packages, describing it as a well run society.
There's a lasting sour taste over Bankers' Bonuses, as we all know. Should building societies be tarred with the same brush?
I don't think that they should. There are no ridiculous six figure bonuses in the sector; bonuses are linked to performance, so Directors have to meet both financial and quality measures to qualify. I am a frim believer as is the Society's Chariman, that a proportion of remuneration should be at risk, thus encouraging committed performance.
Have there been any concessions in pay to reflect the difficult economic climate?
Last year all Saffron's directors took a salary freeze, and we've also scrapped the executive short-term bonus scheme from 2010, meaning that any bonuses earned in 2010 and beyond are not only capped, but deferred on a three year basis. We feel that this puts the onus on directors to maintain a high level of performance over a longer period of time, and discourages chasing short-term goals.
There was another question related to the Summary Financial statement - under 'liabilities' there was a group 'borrowing' total. What does this mean, exactly? This is the sort of question I'd normally put to our finance director, Jon Hall, but he didn't make the AGM due to being stranded in America due to the volcano.
Yes. As with the AGM, I'm picking up the finance questions until he gets back. I can understand why the 'borrowings' total could concern members; it looks like Saffron are taking out loans! In fact, this is money we have on deposit from larger organisations, such as Local Authorities, other Building Societies, private companies, and so on. It's classified separately to 'shares' as these depositors are not classed as members.
The key fact though is that our retail savings balances significantly outweigh our mortgage balances, keeping us safe from the well know issues of over reliance on wholesale markets.
On the back of that question, a member asked whether Saffron's funds had been placed in to short, medium or long term investments.
Well, most of the deposits we hold from other building societies and local authorities are placed for less than three months; so our investments reflect this and are largely short term. The ability to draw on our surpluses supports our liquidly; so this balance represents good treasury management.
Whilst everyone was waiting for the votes to be counted, you gave a presentation to the assembled members about Saffron's future. Can you sum that up, for the benefit of those who couldn't attend the AGM?
The main thrust of that presentation was to concede that, yes, 2009 has been tough and 2010 isn't likely to be much easier - but to explain how Saffron are focusing on positive changes to survive the pressures that are impacting on the entire sector.
What do you mean by 'positive change?'
Saffron is committed to remaining an independent mutual and supporting the communities within its branch network. But we also recognise that it's dangerous to stand still when the world is changing so rapidly. We've been developing new products and services over the last year to help savers take control of their money, in the form of our Goal Saver online account. It was recently awarded the highest accolade in the UK by the charity Fairbanking.
It represents the start of what we hope to do - to engage with people to help them get more from their money long-term. We need to focus on what makes our members come back to us year after year, and embrace new ways of communicating with members where relevant.
Feedback from members on the presentation was very positive. Do you plan to continue involving them as Saffron's future takes shape?
I certainly do. A member at the AGM asked about member engagement, referring to our Branch Governors scheme - a scheme which, sadly, only a couple of people volunteered for when it was launched several years ago.
I want to continue our dialogue with groups of members, both online and face-to-face. We're in the process of organising some lunches for my team to sit down with people who are keen to help us steer the Society in to the next 5-10 years.
I'm sure that all the relevant information will be on Saffron's website in the coming weeks. Thanks for your time Andy.
No problem.
As Andy said, Saffron are focusing on maintaining and developing the level of service for our members. One member asked about the hardware used to stamp passbooks, as he'd noticed that staff had been experiencing a spot of bother with the printers in the Brentwood branch. A question which was passed over to Andrew Rushworth, our Operations Director. Hi Andrew! Welcome to the podcast.
Hello Zoë, nice to join you today.
So, what's happening with Saffron's passbook machines?
I'm going to investigate why the staff were having problems with the machine, but it's worth mentioning that, like many places, we've been deferring big upgrades in our technology due to the uncertain economic climate. However, we're now looking at prioritising some of the more big-ticket items to get our upgrades rolling again.
That's good to know. And what of the Brentwood branch?
I'm glad you asked me that. Subject to agreement on the lease, we're actually relocating our Brentwood branch later this year. Before anyone panics, the new branch is more convenient than the current one, and much nicer. We're really looking forward to serving our Brentwood customers in the new premises.
That's got to be a costly exercise. Won't investment in relocation defer other investment in the Society's equipment?
Well, conveniently enough, the new premises is already set up as a branch and won't need that much work before it opens. While I appreciate that all moves have their costs, we don't see it as a drain on our resources - just an investment in the future of Saffron's branch network.
Thanks for that Andrew
.My pleasure.
To cover off a few more member comments, I'd like to welcome Sales and Marketing Director John Eastgate to the podcast. Hi John.
Hello.
We had one question about Saffron's business model, and whether there were any plans to diversify it any further. What's the response on that?
I can understand why members would want to know the extent to which Saffron plans to introduce new services to its current portfolio. We've introduced Saffron IFA and Saffron Mortgage Brokers in the last 3 years, and our services now extend to offering Wills, Mortgage Payment Protection Insurance and foreign currency.
Where our members have a need of these things, we are glad to be able to help them. However, some of these things are offered through partnerships, often with other mutuals, as there's clearly only so much that our relatively simple business model can offer.
So Saffron are not going down the route of creating any new subsidiaries or similar at the moment?
No, and not for the foreseeable future. As Andy's said, we are looking to move with the times and remain as dynamic as possible, but this will not be at the expense of Saffron's core business of savings products and mortgages.
Finally, amongst all the challenging questions from members, there were a few high points of positive feedback in the AGM.
Yes, and I was delighted to hear them. Some were about Saffron's attitude to branch service, compared to other providers who appear to be scaling back their face-to-face operations. But I was particularly pleased when a member got up to commend the service he had received in our Great Dunmow branch.
It's not the first time that the team has been praised by our members, and I have personally thanked them for their hard work and dedication. We're extremely proud of all of our branch staff - early results from our members' survey indicates that all of our branches are providing a great level of service to our members. They're an absolute credit to us.
Thanks John, good to talk to you. And that's it for our AGM Podcast. We hope you've found in interesting, and that you'll join us again next time for another Saffron Podcast.
