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As part of the ongoing to review of the BBC’s Royal Charter, Sir David Clementi is to look at how the BBC is governed and regulated.

An independent review is to look at how the BBC is governed and regulated the Government has announced.

The independent review will form part of the ongoing process to review the BBC’s Royal Charter to make sure it remains a valued public broadcaster. It will be led by Sir David Clementi - former Chairman of Virgin Money and Prudential, and previously a Deputy Governor of the Bank of England.

The Government makes clear in the BBC Charter Review consultation paper that good governance and regulation are vital to a successful BBC. This will help make sure that the right framework of accountability, incentives, checks and balances necessary are in place so that the BBC delivers for licence fee payers, takes account of its market impact, spends its money wisely and is held to account in doing so.

Sir David has been asked to make proposals, taking account of the responses to the BBC Charter Review consultation, in relation to:

• the model of governance and regulation of the BBC;
• the specific mechanisms of governance and regulation; and
• the way in which the BBC and the bodies that govern and regulate it engage with licence fee payers and industry.

Secretary of State for Culture, Media and Sport, John Whittingdale MP, said:

Television is of huge importance to the nation – and the BBC lies at the heart of British television. However no-one could deny that the BBC has made some bad mistakes in the last few years. Savile, McAlpine, Ross-Brand, severance payments and excessive salaries have all contributed to a widespread view that the governance structure needs reform.

So as part of the Charter Review process, I am pleased to announce that I am setting up an independent review into the governance and regulation of the BBC. It will be conducted by Sir David Clementi, whose experience – including being Deputy Governor of the Bank of England and reviewing the regulation of legal services in England and Wales – makes him uniquely placed to undertake this review.

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 Board’s role in short is to run the BBC. It is responsible for delivering the BBC’s services, its editorial and creative output, and management of the BBC, in line with the strategies and priorities set by the Trust.

The BBC Trust is the sovereign body of the BBC and aims to act as stewards of the licence fee. It is responsible for setting the strategic direction of the BBC, approving the high-level strategy and budgets for services, and holding the BBC Executive to account in delivering this.

As the regulator responsible for the wider broadcasting and telecommunications landscape, Ofcom has a variety of responsibilities that relate to the BBC, including its regulation of broadcast content (e.g. in relation to issues such as harm and offence), handling complaints on these issues, and looking at how the BBC impacts on the wider market.

Sir David Clementi said:

The BBC is a world class broadcaster and requires effective governance and regulation. I look forward to conducting this review.

Sir David has been asked by the Secretary of State for Culture, Media and Sport to submit a report setting out proposals for an appropriate regulatory and governance model for the BBC in the context of the Charter Review including key findings, conclusions, and any other supporting information in early 2016.

Further details on the BBC Charter Review can be found online at www.gov.uk/bbccharterreview.

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1. The Terms of Reference for independent review on BBC governance and regulation (PDF, 112KB, 1 page).

2. The BBC is governed by a Royal Charter, with the current Charter due to expire at the end of 2016. The Government’s consultation paper published in July 2015 is the first stage of the process in setting a new Charter. The public and industry can feed in their views at www.gov.uk/bbccharterreview until 8 October 2015. The Government will then bring forward proposals based on this consultation in the Spring 2016.

3. The BBC Charter Review consultation paper asks the following questions in relation to governance and regulation:

• Q15 - How should the current model of governance and regulation for the BBC be reformed?
• Q16 - How should Public Value Tests and Service Licences be reformed and who should have the responsibility for making these decisions?
• Q17 - How could the BBC improve engagement with licence fee payers and the industry, including through research, transparency and complaints handling?

Sir David Clementi biography

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.