The town of Darlington itself owes a lot to its Quaker influence, which is fitting for the building society’s “thrift” roots, according to its chief executive David Dodd.
And Mr Dodd certainly knows a thing or two about building societies. Starting off on the other side of the Pennines at the Cumberland Building Society in 1974, Mr Dodd has spent almost four decades working for building societies, moving to Darlington in 1998, first as general manager, before being made chief executive in 2009.
But it has not all been plain sailing, as Mr Dodd explained: “Like a number of organisations, we diversified in the 1990s and 2000s. At the end of 2008 we posted the first loss in our history, and most of that was as a result of diversification. Following that, we recruited a new executive team and set about restructuring the business.”
Mr Dodd continued: “Janice Lincoln was appointed as our first finance director and she immediately introduced a structured and rigorous approach to the way that we conducted our business. Then Paul Richardson was appointed as operations director and he re-organised our compliance, controls and risk systems bringing a modern, professional style to the task.”
However, whatever changes the society has made internally for the better, it does not make it immune from the impact of the wider economic climate.
Mr Dodd explained, looking at current economic data, it is hard to believe that interest rates will rise any time in the short term.
Darlington’s plans presume low interest rates for at least the next five years, he said.
Mr Dodd added: “Being a mono-line business means that we will need to focus upon non-price issues to differentiate ourselves.”
These include reducing the society’s cost base and using the additional income to provide better interest rates to its members; increasing its income stream by making better use of its Darlington premises; and continuing to take risks out of the business.
Mr Dodd said: “This year we have refurbished our flagship branch in Darlington. We knew that we could provide a better service with much less space, so we have cut the branch in half. One half will be rented out and again the cost savings will be passed back to members. The new branch will incorporate an art gallery for the local art club, as earlier this year Darlington Council had to close the Arts Centre in town, which was used by local amateur artists to display their work. We have fitted specialist art display equipment to the branch to provide the artists with a permanent display.”
As well as these branch changes, Mr Dodd said that, although he does not have anything sat on his desk at the moment, he would not rule out expanding in the future.
“We are always looking,” he said. “There are a couple of places in the area that we would look at and if something came up that interested us in various high streets then we would have a look at it.”
Mr Dodd said that 2012 had been a “watershed year” for building societies, with customers seeing the value of mutuality, something that he said the societies need to make the most of in the present environment.
He added: “When I look around now I see some really talented people working in building societies and these people are driven by morals, ethics and a sense of fairness, not dividends, share options and large bonuses. We have some young people working here at Darlington who give me real faith in our future.”
As for himself, Mr Dodd said that at the moment there is no need for any “sexy and glamorous” moves, but that once the environment improves and there is a need for that, it will be time for a new chief executive.
He concluded: “I am happy to stay for as long as they want me. The job I am doing now is of a moment and it is probably right that I am doing it.
“But there does come a point when the sun comes out and we need to do something much more entrepreneurial, and at that point I have got to hold my hands up and say that isn’t me and be sensible enough to realise it.”
Amy Ellis is a former senior features writer of Financial Adviser
Key facts:
Established: 1946
Incorporated: 1946
No. of branches: 12
No. of agents: 3
No. of ATMs: 10
No. of F/T staff: 76
No. of P/T staff: 42
No. of borrowing members: 6,268
No. of investing members: 71,002
Total members: 74,502
No. of depositors: 21
