Gideon Spanier: Why the BBC Trust must be empowered to turn the tide of scandal
Media Studies. Plus: Designers say creativity is being stifled by cuts; Forget Ps and Qs, it's all about PR
Monday 17 June 2013
The endless stream of disasters that engulf the BBC are a source of wonder for bosses at other broadcasters which struggle to understand how the Corporation can be so badly run. New director-general Tony Hall, who has returned to the Beeb after 13 years running the Royal House, shares that astonishment and is said to be increasingly angry as more examples of poor management and governance emerge.
The BBC's £98m loss over the Digital Media Initiative (DMI), a failed project to create a digital editing and archive system that ran for years without achieving anything, is the latest disaster. Other woes include selling Lonely Planet, a travel business that the Beeb should never have bought, at an £80m loss in March, the row over huge pay-offs for executives who were leaving anyway and, of course, the Jimmy Savile scandal.
DMI is serious because Mark Thompson, D-G from 2004 to 2012, assured Parliament the project was on track.
The BBC Trust, the in-house regulator, is also under fire because it is meant to hold the management, led by the D-G, to account. Trust chairman Lord Patten is an easy target but the picture is more complex.
The problem is the board of trustees does not have complete oversight of the separate management board because of a muddled governance structure.
When the Trust was set up in 2007 as a replacement for the Governors (in the wake of another crisis over Andrew Gilligan's report into "sexed up" intelligence about Iraqi weapons of mass destruction), Parliament agreed that a clutch of non-executive directors from the business world should be appointed to sit on the management board and inject external rigour.
Crucially, it is these non-executive directors, rather than the trustees, who sign off the BBC's accounts and executive pay, through their own audit committee and remuneration committee.
One insider calls it "a design flaw" because of the potential for tension and so it proved in recent years. Some on the Trust felt the non-executive directors were difficult to deal with as they had a tin ear about reducing executive pay and were dismissive of the Trustees' business acumen.
No wonder when the non-executives have included tough characters such as Marcus Agius, former chairman of Barclays bank, and Mike Lynch, founder of software giant Autonomy, who both served from 2007 to 2012.
Alas DMI and other woes would suggest that the non-executives have not brought much business acumen to the BBC (and that's leaving aside the fact Agius had to resign from Barclays last year over Libor-fixing and Lynch's legacy at Autonomy has been hit by allegations of accounting irregularities, which he denies).
Anthony Fry, a BBC Trustee since 2008, hinted at tensions between the Trust and management when he was asked by the Commons Public Accounts Committee last week if they should summon Thompson to explain what went wrong with DMI. "I would very much welcome you summoning him," said Fry.
MPs also heard that the management team in charge of DMI consisted of Thompson and then technology boss Erik Huggers at the top, followed by six senior managers, nine Controllers, 18 heads of department and nine project-department supremos!
The BBC won't comment except to say the failure of DMI is a "huge concern" and will be investigated by accountants PwC. But this isn't the only scandal brewing. I am told new revelations about pay-offs for senior bosses will cause a further storm.
Some say the BBC should have a single board – instead of the separate management and Trustees – but there is a quick solution: Strengthen the Trust by giving it full oversight of audit and remuneration.
Designers say creativity is being stifled by cuts
It took the Opening and Closing Ceremonies at last year's Olympics to show Britain, as much as the rest of the world, about the strength of our creative industries.
Risk-taking is a prerequisite for creativity, and there was a reminder at last week's D&AD Awards, the top international awards for design and art direction. Thomas Heatherwick's cauldron and Channel 4's "Meet The Superhumans" advertising for the Paralympics won top honours. Design duo Osgerby Barber's Olympic torch was also awarded.
But behind the feelgood memories was an anxiety among the creatives. Five years of on-off recession have made the West risk-averse, they say, while those in fast-growing countries such as China and Brazil brim with confidence.
The Olympics unleashed a burst of creativity but Neville Brody, president of D&AD and former designer of The Face magazine, is pessimistic.
"Creative industries have been violently assaulted by this Government who don't seem to realise they employ more than 2.5 million people," he says, referring to austerity cuts. "The Government has completely undervalued creative industries and creative education as far as the future of this country is concerned."
Forget Ps and Qs, it's all about PR
When Stephen Hester quit as chief executive of Royal Bank of Scotland, the bank tweeted the news and posted video interviews of Hester and chairman Philip Hampton on its website.
In the social media age, every company must think like a media brand, because we all expect to find information at the click of a button. If a company isn't communicating about itself, it looks bad and won't stop chatter on the blogosphere.
Corporate PR is growing as it occupies new territory that is neither financial PR for the City nor consumer PR for the mass market. Paddy Harverson, spin doctor for the Duke and Duchess of Cambridge, and Google PR D-J Collins have just quit to launch their own agency Milltown Partners. Simon Kelner, former editor of The Independent, has also set up Seven Dials. The buzz phrase is corporate reputation management, which sounds defensive because it is. Reputations can be trashed in double-quick time these days.
The focus is also on advice and strategy, says Chris Lewis, who founded Lewis PR 18 years ago. Lewis has 25 offices around the world. Others such as Brunswick, RLM Finsbury, Next 15 and Huntsworth are expanding overseas. London's status as a media capital means its PR skills are in demand globally.
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