The members of the EBS building society gather today to elect new directors and address other business at the mutual society's annual general meeting. In the normal run of things it is not a particularly important date in the business calendar but on this occasion, it promises to be a lively affair.
An independent director, Eithna Tinney, is seeking re-election in the face of trenchant opposition from the rest of the board. The members will have to decide her fate, as best they can, on the basis of the information put into the public domain, both directly and indirectly, over the past number of weeks.
But whatever the outcome, a great deal of damage has been done to the society and the board must act quickly to restore its members' confidence, both in themselves as a group of directors and in the concept of mutual ownership.
The information now in the public sphere reveals that for much of the last three years the board was deeply divided and dysfunctional, riven by discord over issues ranging from the proposed merger with another financial institution to executive pay. The EBS claims that much of this is now water under the bridge, that steps have been taken to ensure that the board is renewed and that there is adequate oversight on the issues raised.
However, repairing the damage to the EBS's public standing will not be so simple. The society has always emphasised its mutual structure and with the expected sale of the Irish Nationwide, will soon be the only mutual in the market. The essence of mutuality is that the organisation is owned by its customers, rather than external shareholders, and is run for their benefit. In theory this ethos defines everything the organisation does and should manifest itself in both customer service and price.
There is little in what has come to light in recent weeks that gives comfort that this is really the case or that the board is committed to these worthy ideals. Indeed the board seems more than usually self-interested. And when the society is judged by the other yard stick - the value it offers customers - it also falls short of what might be expected. This, in turn, calls into question the real value of its mutual status, the maintenance of which denies members the opportunity of realising their share of the value locked up in the society through a sale.
If the EBS wishes to maintain its existing status - and it is surely desirable in a highly competitive and commerical market place that consumers should have the option of membership of at least one mutual building society - it must prove its worth by living up to the ideals of mutuality. This will remain the case irrespective of the outcome of today's vote.