An independent review commissioned by Government to look at how the BBC is governed and regulated has concluded that the current model should be replaced.
The report, A Review of the Governance and Regulation of the BBC, which forms part of the Government’s review of the BBC’s Royal Charter, recommends that:
- regulatory oversight of the BBC should be passed wholly to Ofcom; and
- the BBC should have a unitary Board made up with a majority of non-executive directors.
Currently there are three key groups that make up the system of governance and regulation of the BBC - the BBC Executive, the BBC Trust and Ofcom. The BBC Executive’s role is to run the day-to-day activities of the BBC, with the BBC Trust as the sovereign body of the BBC that has overall responsibility for the strategic direction of the BBC and acts as steward of the licence fee, holding the BBC Executive to account. Ofcom currently has a role as the regulator responsible for the wider broadcasting and telecommunications landscape.
Sir David Clementi who led the review said:
Following consultation with a wide range of interested parties, and a detailed assessment of the options, I have concluded that there should be a fundamental reform of the system of governance and regulation for the BBC.
The BBC Trust model is flawed. It conflates governance and regulatory functions within the Trust. The BBC should have a unitary Board charged with responsibility for meeting the obligations placed on it under the Royal Charter and Agreement, and responsibility for the interests of Licence Fee payers.
Regulatory oversight should pass wholly to Ofcom, which is already the public service regulator for the UK’s broadcasting industry and has the ability to look at the BBC in the context of the market as a whole. Ofcom would be a strong regulator to match a strong BBC.
The report also recommends that:
- the primary responsibility for the interests of the Licence Fee payers should lie with the BBC Board;
- Ofcom should issue the BBC an ‘Operating Framework’, consistent with the revised Royal Charter and Agreement, which would set out the obligations placed on the BBC;
- the Operating Framework should include ‘Operating Licences’ which would set out the BBC’s broadcasting content and distribution obligations, including services for the Devolved Nations;
- the Charter should place on the BBC a duty to consult with the public both as consumers and as Licence Fee payers; and
- the BBC should have a clear ‘Broadcaster First’ system of complaints where it handles complaints in the first instance with Ofcom handling appeals on editorial issues.
Sir David has presented his report to the Secretary of State for Culture, Media and Sport, to feed into the ongoing BBC Charter Review process.
Further information about the independent review on BBC governance and regulation can be found in the terms of reference.
About Sir David Clementi:
Sir David Clementi has been Chairman of a number of organisations in both the commercial and not-for-profit sector. He has board-level experience across a wide range of sectors: finance, mining, legal services, education and the arts. From 2002 to 2008 he was Chairman of Prudential plc. Before joining the Prudential, Sir David was Deputy Governor of the Bank of England for five years, 1997-2002. In addition to his membership of the Monetary Policy Committee, he was responsible for the day-to-day management of the Bank.
Before joining the Bank of England, Sir David worked for Kleinwort Benson for 22 years (1975-1997), including as Chief Executive (1994-1997). In 2003/4 he carried out a review for the Government of the regulatory framework for legal services in England and Wales, which covered both governance and regulatory issues within the legal profession.
Sir David has significant experience of governance issues in different types of organisations. He has chaired a number of board committees, and most recently he has acted as Senior Independent Director and the Chairman of the Finance and Audit Committee of the Royal Opera House. He also has significant experience of regulatory systems. In addition to his time at the Bank of England, he was a Director of the Financial Services Authority from 1997 to 2002.
Sir David graduated from Oxford University with a degree in Philosophy, Politics and Economics. He spent two years at Harvard Business School obtaining an MBA. He is an Honorary Fellow of Lincoln College, Oxford and an Honorary Member of the Royal Institution of Chartered Surveyors. He was appointed Knight Bachelor in the New Year Honours’ List in 2004.