The BBC Trust today announced a series of changes to the governance arrangements for BBC Worldwide. As part of its review of the BBCs commercial activities the Trust has agreed a revised governance framework within which the BBC must operate its commercial activities.
These changes are designed to strengthen the oversight of the BBCs commercial operation and ensure even greater clarity and confidence in the separation of the BBCs public service and commercial activities.
Among the changes agreed are: – the BBC Worldwide Board, which is a subsidiary board of the BBCs Executive Board, will become smaller and more focussed on the delivery of a rolling three year commercial strategy agreed by the Trust; – the new chairman of the BBC Worldwide board must be a non-executive director from the BBCs Executive Board thereby strengthening the link between the two boards and the role of the BBCs public service arm as the shareholder in the company; – there will be changes to the membership of both the BBCs Executive Board and the Worldwide Board in order to reduce the potential for conflicts of interest. Specifically, the Chief Executive Officer of BBC Worldwide will no longer be a member of the BBCs Executive Board and staff from BBC Vision (who produce most of the BBC content subsequently sold by Worldwide) will not be eligible to be members of the Worldwide Board. This will result in Jana Bennett stepping down from the BBC Worldwide Board.
These changes will bring the business further in line with the Combined Code on Corporate Governance. The Trust has also stipulated that it expects BBC Worldwide to operate as far as possible within the principles set by the Code, and any deviation from it needs to be agreed by the BBC Trust.
This new governance framework for BBC Worldwide, proposed by the Executive Board, will be stipulated in the Trusts protocols. The BBCs Executive Board, led by Director-General Mark Thompson, will be responsible for ensuring compliance with it. The changes will come into effect from 1 October 2009.
In addition to the above changes, the Trust has decided that the financial threshold for referral of transactions for Trust approval should be lowered from £50m to £30m and the Trust will retain the ability to scrutinise any activity that it believes is not consistent with the strategy it has agreed.
Sir Michael Lyons, Chairman of the BBC Trust, said:
“The BBC Trust believes that these changes will strengthen the ability of BBC Worldwide to deliver value to licence fee payers through the return it makes on content owned and paid for by licence fee payers. The changes also respond to concerns raised by commercial competitors and others.
“These changes build on the principles set out in the interim conclusions of the Trusts commercial review, in which we set out our vision for a focussed BBC Worldwide that is more closely aligned with the BBCs public purposes. There will be no delay in progressing that objective although we must await the outcome of Governments Digital Britain review.
“Mark Thompson is right to say that in the longer term the BBC will look at whether Worldwide needs to be 100 per cent owned by the Corporation. However, the Trust wont contemplate any loss of direct control over BBC rights created as result of investment from the licence fee payer.”
The appointment of a new Chairman of the BBC Worldwide Board will be for the BBCs Executive Board to make; the current Chairmans term ends on 30 September.
This concludes the governance aspects of the Trusts review. The Trust aims to report on the remaining elements of the review following clarification of the outcome of the Digital Britain consultations.