"This was true democracy at work," he says of the 1.3 million Nationwide members who voted by a margin of three to one to see off the pro-conversion candidates. "Of course, we are pleased with the outcome, but that does not mean we can be complacent."
On the platform, in front of hundreds of Nationwide members who turned up at the Royal Lancaster Hotel for the AGM on Thursday, Davis and Charles Nunneley, the Nationwide's chairman, were unequivocal in their commitment to remaining a building society, and confident in the whole-hearted support of the membership.
Afterwards, and in private, Davis is more circumspect. The fact that over a quarter of the votes went against the board is not something he takes lightly. "It is an incredibly serious challenge. Even though we won, there were a lot of votes - 350,000 - in favour of conversion. Looking at the quality of the candidates, I was surprised at that number. The message to us clearly is that we have to do more to convince those people that they are better-off in the long term with us as a building society than they would be with us as a bank."
However, Davis believes that the vote is a direct endorsement of the board's strategy to preserve its mutual status and exploit the advantages of not having shareholders to please and dividends to pay. "What's been missing from this debate so far is the consumer. Looking at the rates we offer compared to those of a bank, I cannot see why anyone would do business with a bank. If we were all out of the equation, either by a takeover or by conversion, interest rates on loans and mortgages would go up overnight, and someone would have to invent the building society all over again to counteract this."
City analysts agree that Davis has played the Nationwide hand well, and spiked the guns (for now at least) of the demutualising movement, much to the relief of executives at other building societies with less robust track records. But they disagree with his contention that the building society is an essential part of the banking market.
"As far as Davis's tactics are concerned, I take my hat off to him," says Richard Coleman, banking analyst at Merrill Lynch. "He led the media to believe that the vote was going the other way, and dressed it up as a moral exercise - the village green and warm beer argument.
"But that does not get away from the fact that the banking sector is massively oversupplied, and that the building societies are amongst the least efficient players in it. If anything, the consumer would be better off if the building societies disappeared, because the new entrants in the mortgage and savings market - supermarkets, insurers and the like - will have a better chance of competing with the established banks."
There is also talk among commentators that the Nationwide vote is a Pyrrhic victory, and that demutualisation - or takeover - is an inevitability. Their thinking goes that a more credible set of candidates standing on a conversion platform would have received many more votes; and a cash takeover offer from a bank would undoubtedly be more persuasive.
"The question remains whether Nationwide members voted against mutuality or just against Hardern," says Michael Lever, banking analyst at HSBC James Capel. "If you wave pounds 1,000 or more in fivers in front of them, will they vote the same way as they did this time, when they were asked to vote for some unsuitable characters and no cash on the table?"
Lever acknowledges that Nationwide has strengthened its case for staying a mutual as a result of the vote. But he still expects it to demutualise eventually.
All this is water off a duck's back to Davis. He says he has heard the arguments for demutualisation, and does not buy them. "All we would be doing is paying City bankers a lot of money and City lawyers a lot of money to put ourselves in a position that our members have told us they don't want to be in. It is not as if we will suddenly discover oil on the way to becoming a plc."
His job now, he says, is to carry on the improvements to Nationwide. Davis has been in the chief executive's job for three years now, and in that time the society has dumped its disastrous investment in estate agents at a cost of pounds 200m, launched its own life insurance company, and made around 1,000 staff redundant. Critics, including some of the members who voiced their concerns at the AGM, say that there is plenty to do, pointing to the perennially low ranking Nationwide achieves in the annual UBS survey of building societies.
It is hard to fault Davis's attitude, though. He gives the impression of a friendly parish priest, with lots of ideas for improvements, and his performance in front of a crowd is polished and relaxed. He confessed recently that he used to hate public speaking until he took up amateur dramatics. Now he says he just gets into acting mode whenever the podium beckons.
Born in Glasgow in 1946, he holds two degrees, the second a doctorate in solid rocket fuel engineering, making him the subject of more than a few "rocket scientist" jokes. He joined the Nationwide in 1986 after being made redundant from Esso. His first job at the building society was to reconcile the computer systems of Nationwide with those of the Anglia building society, with which it had just merged. It was a tricky process which in the end took years to complete, and for a time caused the society's overheads to balloon to more than 60 per cent of its income. He still rates the travails of the computer system as a more challenging task than seeing off the hordes of demutualisers.
However, the second of these tasks is far from complete. Possible suitors ("friendly vultures" as Nunneley describes them) were on the phone in the weeks before the outcome of the vote, and many are still in the market. Davis is scornful of some of the names suggested, like the Alliance & Leicester, which he describes as "half our size and without a strategy", but says the society would be foolish not to consider the right kind of offer from the right party.
"We had conversations, but to imply they were anything more substantial than that would be daft. We got no firm offers in that time. If someone offered us a deal and it was very good, we would have to present it to the members; it's as simple as that. We have no axe to grind. But until that happens, there is no point in dwelling on it."
If market rumour is to be believed, the offers may come sooner rather than later. Lloyds TSB and Prudential were among those making informal inquiries, and both have the size and reason to make a formal approach. For Lloyds it would be the customer base, which it could add to its branch network and in effect remove Nationwide from the high street. For the Pru, the Nationwide would offer the insurer a chance to sell its life and pension products to 3 million customers, and it would keep the branch network to give itself much-needed visibility.
The conversion to a bank option is probably out of contention for now. There is the possibility of legislation to make it hard for societies to become banks or succumb to hostile takeover bids. In the next few weeks Davis, as chairman of the Building Societies Association, will meet with Treasury officials to explore options for further amendments to the 1986 Building Societies Act to inhibit speculators from pressurising societies into conversion. The idea would be to enforce a waiting period between account openings and voting rights and to make the approval threshold for conversion higher than the current 75 per cent of the vote, with at least 50 per cent of eligible members voting.
Challenges loom for the Nationwide chief, but for a short time at least he can bask in the glow of victory. "Everyone thought we would lose. Now, anyone who wants to try their chances as a pro-conversion candidate is going to run up against a board that has been elected on an overwhelming mandate to remain committed to mutuality.
"If anyone wants to challenge that, they will be in for a fight."
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