The demutualisation of building societies : a contextual analysis of the changing nature of mutuality

Talbot, Lorraine (2002) The demutualisation of building societies : a contextual analysis of the changing nature of mutuality. PhD thesis, University of Middlesex. [Thesis]

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The contention of this thesis is that the demutualisation of building societies may be understood as resulting from the process of reconceptualisation that mutuality has undergone throughout its history. It is suggested that the history of mutuality is the history of the tendency towards its own
destruction as building societies evolved from small local concerns into being some of the largest financial institutions in the national economy. Further to this, it is suggested that observation of the nature of mutuality at various historical moments provides insights into the nature of building
societies per se. Furthermore, the nature of mutuality at any historical moment reflects the contextual forces that prevail upon it. In other words, mutuality provides an index to the political, social and economic forces at a particular moment in history and understanding mutuality in this way provides a framework in which to understand future developments in mutual building societies.

In support of this hypothesis, this thesis demonstrates that mutuality in the context of early building societies denoted equality between members in respect of rights, responsibilities and benefits. Mutuality meant equality, responsibility and benefits and the concept described actual
material relations. However, when building societies became widespread and highly capitalized, policy and legislation combined to construct a mutuality that created a manageable financial institution for the wealthier working classes and lower middle classes. Mutuality denoted the political imperative to encourage thrift and property ownership within a legislative framework and it was characterized by the separation of the borrower- member role from the lender-member role and the formal creation of a legal entity, the incorporated building society.

By drawing upon distinct historical periods, this thesis contends that this hybrid commercial organization, the mutual building society, is to a great extent the creature of government policy, which is central to the construction or destruction of mutuality. This is patiicularly evident in the
politics that informed the passage ofthe 1986 Building Societies Act, which provides for conversion or demutualisation. However, as this thesis demonstrates, mutuality reflects the internal character of building societies such as the relationship of the membership to the society,
and external factors, such as the political and economic climate. Thus, the maintenance of mutuality will depend on the interplay between these factors.

Item Type: Thesis (PhD)
Research Areas: A. > Business School
Item ID: 13431
Depositing User: Adam Miller
Date Deposited: 12 Jan 2015 16:03
Last Modified: 21 Jun 2021 16:46

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