Friendly societies are mutual financial associations in which members pay membership fees to receive benefits. They are well known for their work in insurance, co-operative banking, as well as pension and savings funds. Friendly societies tend to operate locally and are closely tied with their communities, although there are also several friendly societies operating at the national level. As is the case in every mutual organisation, member participation is a key factor in operating a friendly society. The society is run for and by its members, therefore members have a say in how the friendly society is operated and elect the board of directors.
Friendly Societies' Role in Society
In the 19th century, friendly societies’ standing within society was at its peak. Prior to the establishment of the welfare state, friendly societies were the main provider of financial services to their members, giving them a reliable safety net in case of illness or a death in the family. After the introduction of the welfare state in the late 1940s, there was a decline in the number of friendly societies from over 20,000 in the 1800s to around 200 today. Despite this drop in number, friendly societies are still an important part of the British financial services sector.
Board of Directors Elections in Friendly Societies
Friendly societies are unique in their mutuality within Britain's financial sector and all members can vote on their board of directors and other decisions concerning the society. In addition, some of the larger societies have a delegate system in place in which the members vote for a delegate in their local branch. These local delegates then elect the board of directors. Board members are subject to re-election and appraisal at varying intervals.
See also: Building Society
, Credit Union
, Community Benefit Society