The BBC will fight for a plc-style approach to unitary board appointments, as the corporation’s independence becomes a key battleground over the coming months.
Culture secretary John Whittingdale’s white paper broadly accepted Sir David Clementi’s recommendations on governance and regulation arrangements, but made clear that the government should have a role in appointing six members of a new BBC unitary board.
It said the Department for Culture, Media & Sport should oversee the hiring of the board’s chair, deputy chair and member for England. The governments in Scotland, Wales and Northern Ireland would then hire the three other non-executives (see box).
This would leave the BBC with the right to appoint a further six to eight board members, either as executives or non-executives, which opens the door to BBC appointed members having a majority on the governance team.
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The BBC could appoint a majority of directors to its unitary board
Whittingdale said: “For the first time, the BBC will have the ability to appoint a majority of its board independently of government. This is a major change.”
But critics have claimed that this could make the board unwieldy in terms of size and lead to factions emerging, while the BBC views it as a direct threat to its independence.
Unlike the BBC Trust, the unitary board will have oversight of BBC editorial and the corporation is fearful this could lead to government- appointed directors having input on crucial decisions.
Instead, the corporation is pushing for a plc approach to board appointments. Under this arrangement, the BBC chairman, appointed by government, would have the power to hire the broadcaster’s non-executive directors.
A senior source said: “Our starting point would be that the chairman would appoint the rest of the non-executives. We will work very hard to get the government to compromise on that.”
Whittingdale confirmed last week that BBC Trust chairman Rona Fairhead will be asked to see out her term as chair until 2018. She, too, has raised concerns about the government appointment plans.
“We need to debate these issues to ensure the arrangements for the board achieve the correct balance of independence, public oversight and operational effectiveness,” she said.
The government will set out a transition timetable this summer for the Trust to hand governance and regulation to the unitary board and Ofcom respectively.
The unitary board will oversee strategy, service delivery, operational delivery, performance measurement and public engagement.
Ofcom will take care of issuing service licences, regulating editorial standards, complaints arbitration and regulating the BBC’s commercial activity and market impact.
The National Audit Office (NAO) could replace EY as the BBC’s auditor. It would feed findings back to the Public Accounts Committee (PAC) to evaluate whether the BBC is providing value for money.
The BBC wants assurances that the NAO will not be allowed to access editorial information. It also intends to ward off an idea floated in the white paper to give the auditor access to its commercial subsidiaries.
“We are strongly against that on the basis that there’s no public money,” said the insider. “There is no precedent for it. It could put people off working with Worldwide if they think they’re going to be called in front of the PAC”.
Whittingdale justified the move by citing BBC Worldwide’s acquisition of Lonely Planet, on which the corporation made an £80m loss when it sold the travel business in 2013.
“The licence fee payer has a strong interest in the BBC’s commercial activities, because the more the BBC can raise through those activities, the less will be the call on the licence fee payer,” he said.
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