The Business Exchange Bath & Somerset Issue 9: Autumn 2018 | Page 13

FINANCE
The ‘why’ of us being in business
by Kevin Gray, Chief Executive of Bath Building Society
Kevin Gray, Chief Executive
of Bath Building Society
Bath Building Society just happens to be the most profitable
building society in the UK measured on asset size. It also
happens to have exceptionally strong capital ratios.
Much as these statistics are
impressive, profit is not the reason
why we are in business. Profit is only
a financial measure of the output
from our business activities.
Even though it is a pretty
decent profit generator, and we
are proud of that fact, as a mutual
organisation that is owned by its
members, the Society does not have
to pay dividends and it is therefore
not under pressure to be a profit
maximiser. Clearly the Society must
have a reason to exist that is greater
than the sole pursuit of profit. I
believe that this has to be true of all
business organisations if they want
to have longevity.
The answer to the question of
why we are in business relates
to the Society’s social purpose.
Traditionally the Society has always
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thought of itself as ‘a home for
your savings.’.. and savings for your
home’. This is a neat description of
what we are about but it does pose
some questions. For example, is the
Society a savings institution first and
a mortgage lender second? Are the
savings and mortgage businesses
equally important to the Society? Is
mortgage lending on property that
is not residential ok for the Society
to do?
The Society is shortly to undertake
work to pin down its social purpose
for the 21st Century. This will involve
looking back at why the Society was
established by its founding fathers.
It will involve some soul searching
and many questions will need to be
answered.
As Chief Executive I want everyone
in the business to know why we are
in business as that will dictate the
direction of our future strategy. I also
want to be able to leave the business
at some future date with everyone
clear as to why members should
choose to join Bath Building Society
in preference to other financial
organisations.
If our social purpose is correctly
defined, then we have a better
chance of our strategy being the
right one to deliver future success.
We may even deliver higher profits
as a result!
@BathBuildingSoc
05/10/2016 17:17
THE BUSINESS EXCHANGE
2018 13