“There’s no one else quite like us,” goes the refrain at Nationwide as it champions the virtues of being a big building society rather than a big bank. “We are the only major banking provider that doesn’t have to answer to shareholders – we’re built to put our members first.”

It’s true that Nationwide brings welcome biodiversity to the banking jungle. The organisation is owned by its 17 million members – its customers – and is five times bigger than the next largest building society. What’s more, its members mostly seem happy with the service. Nationwide tends to come top of industry polls on that score.

So we should be glad the society dodged the demutualisation craze of the 1990s that saw the likes of the Alliance & Leicester, Bradford & Bingley and Northern Rock convert to banks, with generally terrible results. The mutual movement could have faded into irrelevance if Nationwide had fallen to the carpetbaggers.

Yet the boast about not being answerable to shareholders rings hollow when you see the limits of democracy, and thus boardroom accountability, at Nationwide.

Exhibit A is the group’s adventure into the world of big acquisitions – last year’s £2.9bn purchase of Virgin Money. At a bank, shareholders would have had to approve the deal because the balance sheet was being increased by a third. By contrast, Nationwide’s members weren’t given a vote on a transaction that plainly has the potential to come back to bite them if it goes wrong.

The explanation was coherent only in a legal sense: the 1986 Building Societies Act didn’t require a vote, and Nationwide would fall foul of the City takeover code if it inserted conditions that were not required by law. Come on, though, that is hardly satisfactory: there is a clear gap in regulations that were drawn up at a time when it wasn’t imagined that building societies would buy banks.

Exhibit B is the flashpoint for Friday’s annual meeting – the 43% increase in chief executive Debbie Crosbie’s maximum pay package to a mighty £7m. The society’s argument is that, after the Virgin deal, Nationwide is bigger and needs to mind the “competitive gap” on pay with NatWest and Lloyds Banking Group. “This is not about personal greed,” the pay committee chair, Tracey Graham, told the meeting. “It’s about equity with people who do similar jobs elsewhere.”

What did the members make of that argument? It’s hard to say precisely. The poll on the remuneration report was merely advisory. Again, apparently, the rules don’t require a binding vote and Nationwide didn’t choose to have one. As it happens, 95% of votes were cast in favour – but the fact the board can ignore any rebellion is hardly an encouragement to turn out.

In similar fashion, any member wanting to put themselves forward for election to the board – a not uncommon feature at building societies a generation ago – now has to have 250 nominations. Wannabe volunteer James Sherwin-Smith failed at that hurdle but may have been stymied by data protection rules, signature requirements and so on. It does not look as though Nationwide tried to assist him through the thicket.

Kevin Parry, the chair, offered no hint that any of these signs of a governance deficit cause him any difficulty. He addressed questions at the meeting openly but “them’s the rules” was the gist of his responses.

For now, he can probably afford to be sanguine. Nationwide is performing well financially and it’s too soon to tell if Crosbie’s bet on Virgin Money will succeed or flop. It may also be only a small minority who would prefer Nationwide’s “fairer share” payments to be used instead to sharpen savings and lending rates. In good financial weather, you can even get away with portraying your bank rivals as oily fat cats in your TV adverts as your own chief executive is handed a potential £7m package.

In trickier circumstances, however, it is not hard to see how life could become awkward. It is surely indefensible that shareholders in a bank get a binding vote on big takeovers and boardroom pay but members of Nationwide do not. That is a bad spin on the “we’re different” shtick. If the members are truly the owners, the governance needs an overhaul. It would be best done outside a crisis. If the rules for building societies are the problem, lobby to change them.