MINUTES OF THE BBC BOARD OF GOVERNORS’ MEETING (DAY 2)
Thursday 21st July 2005 At the BBC Media Centre, White City
Present: Michael Grade Chairman Anthony Salz Vice-Chairman Deborah Bull Governor Andrew Burns International Governor Dermot Gleeson Governor Merfyn Jones National Governor for Wales Fabian Monds National Governor for Northern Ireland Jeremy Peat National Governor for Scotland Angela Sarkis Governor Ranjit Sondhi Governor/Chairman of the English National Forum Richard Tait Governor
Apologies: Ruth Deech Governor
In attendance: Mark Thompson Director-General Mark Byford Deputy Director-General Zarin Patel Group Finance Director John Smith Chief Operating Officer Caroline Thomson Director, Strategy
Nicholas Kroll Director of Governance Sally Kendall Head of Governors’ Business, Governance Unit Tina Stowell Head of Communications, Governance Unit
For items: 84-86 Helen Boaden Director, BBC News 84-89 Jana Bennett Director, Television 88 Alan Yentob Director, Drama, Entertainment and Children’s 88-89 Tim Davie Director, Marketing, Communication and Audiences 82 Mark Friend Controller, Strategy 82 Natasha Smith Head of Financial Planning 82 Gareth Firth PA Consulting 82 Rod Scott PA Consulting 84-86 David Jordan Chief Advisor, Politics 87 Bal Samra Business and Finance Director, Television 88 Alison Sharman Controller, CBBC 89 Roly Keating Controller BBC Two
1 AGENDA
1. Minutes of and Matters Arising from the Board Meeting held on 16 June 2005
2. Director-General’s Report
3. Finance Report: June 2005
4. Licence Fee: Making the Case
5. Investment Case – Pacific Quay: Technology Solution
6. Review of the BBC’s Coverage of the General Election 2005
7. Quarterly Tracking Survey: Perceptions of the BBC’s Impartiality
8. Update on BBC News’ Coverage of the European Union
9. Content Supply Review: Implementing the Window of Creative Competition
10. The CBBC Channel: Tone and Presentation
11. BBC Two Strategy Update
12. AOB
13. Items for Noting
14. Reports / Minutes from Committees of the Board of Governors
15. Key Issues and Minutes from Broadcasting Councils and the English National Forum
79 MINUTES OF AND MATTERS ARISING FROM THE BOARD MEETING
2 HELD ON 16 JUNE 2005
79.1 Minutes The minutes of the Board meeting held on 16 June were approved for signature by the Chairman. The Board agreed that the minutes be published with some redactions.
79.2 Matters arising The matters arising from the Board meeting held on 16 June were noted and Governors were informed that the strategy update on BBC THREE requested at the last meeting would be brought to the Board in October.
79.3 The Board was updated on the sale of BBC Broadcast Limited (BBCB) following approval of the process for determining the recommended purchaser by the Board in June. The Chairman and a subgroup of Governors had approved the sale to Creative Broadcast Services Ltd (owned by the Macquarie Capital Alliance Group and Macquarie Bank Limited) for a purchase price of £166million, subject to approval from the Secretary of State for Culture, Media and Sport. The Board was updated on the position regarding a complaint to Ofcom concerning BBCB and other potential risks. Governors requested a briefing outside the meeting on the timing and financial risks to the transaction and the impact on the BBC’s overall financial plan.
80 DIRECTOR-GENERAL’S REPORT - ORAL
80.1 The Director-General briefed the Board on coverage of the London bombings and the BBC’s business continuity and security operations. Over 31m people had watched BBC News’ coverage on 7th July and page impressions to the BBC News website had doubled. The Deputy Director-General summarised highlights of coverage on television and radio across the UK, including local news from BBC London and Look North.
80.2 Governors discussed the debate which had surrounded the use of the terms “terrorist” and “terrorism” and were briefed on the judgements made across the BBC in interpreting the BBC’s Editorial Guidelines and feedback from the audience. The Deputy Director-General reported that the Director-General had asked the Journalism Board to consider the application of the Editorial Guidelines with regard to these terms and whether further guidance was required. He confirmed that he would report to the Board in due course.
80.3 The Chairman recorded the Board’s thanks to those involved in covering events of such complexity and its satisfaction over the level and tone of reporting.
80.4 Other headlines for the month included:
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- the Africa Lives season, Live 8 and coverage of the G8 Summit - downloads of Beethoven’s symphonies from bbc.co.uk - the launch of the BBC One autumn season - award successes including RIMA, the Broadcast Digital Channel Awards and the RIBA Awards - the appointments of Roger Mosey as Director of BBC Sport and Nick Robinson as Political Editor
81 FINANCE REPORT: JUNE 2005
81.1 The Board noted the financial headlines for June and approved the release of £5.1m of the budgeted £25m 2005/06 Programme Strategy Review investment. The remainder of the budgeted investment remained on hold subject to the sale of BBC Broadcast Limited.
81.2 Management agreed to supply the Chair of the Audit Committee with a note on the financing of Pacific Quay and the BBC’s framework for off balance sheet financing.
82 LICENCE FEE: MAKING THE CASE
82.1 The Board was updated on the internal discussions about the Licence Fee settlement and the presentation due to be given to Department for Culture, Media and Sport, following discussion at the Governors’ Finance & General Purposes Committee.
82.2 Governors also received a report from their external advisors, PA Consulting, assessing the BBC’s assumptions and arguments underpinning the level of Licence Fee revenues required over the new Charter period. PA Consulting would continue to review management’s proposition on behalf of the Governors over the summer.
82.3 [Withheld from published minutes]
82.4 The Board noted progress and approved the presentation of the BBC’s initial Licence Fee submission to Government.
83 INVESTMENT CASE – PACIFIC QUAY: TECHNOLOGY SOLUTION
The Board approved the proposed technology solution for Pacific Quay, the 83.1 new headquarters of BBC Scotland, accepting the recommendation from the Governors’ Finance & General Purposes Committee.
83.2 The details of the approval were:
4 - A maximum capital cost of [Withheld from published minutes] for the technology to be delivered using Siemens as Design, Build and Handover contractor, conditional on agreeing satisfactory commercial terms; - A £1.8m increase in migration costs (including training, piloting and backfill costs in relation to the widened scope of the business transformation programme across BBC Scotland); - The contracting of Siemens to provide managed services covering technology support services and digital production, subject to BBC Scotland and the Director-General’s Finance Committee approving final terms; - The establishment of operating leases (as part of the overall financing solution), subject to the Director-General’s Finance Committee approving final terms.
84 REVIEW OF THE BBC’S COVERAGE OF THE GENERAL ELECTION 2005
84.1 The Board considered a presentation from management on research commissioned on the BBC’s General Election coverage, noting the overall positive performance both in terms of audience perceptions and ratings across all platforms, and the areas in which the audience thought the BBC’s coverage could be improved.
84.2 [Withheld from published minutes]
84.3 [Withheld from published minutes]
84.4 The Governors’ discussion focused on the following:
[Withheld from published minutes]
- Concerns raised by the Broadcasting Council for Scotland that coverage had not always differentiated between UK-wide and Scottish politics; the Council was asked to report specific examples as and when they arose to BBC News and management confirmed journalists would be reminded of the issues.
84.5 Overall, the Board concluded that the BBC had performed well during the General Election and noted management’s commitment to improving performance in areas identified.
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85 QUARTERLY TRACKING SURVEY: PERCEPTIONS OF THE BBC’S IMPARTIALITY
85.1 The Board considered the January-March 2005 results of the Perceptions of the BBC’s Impartiality Survey, commissioned from MORI to monitor changes in perception by the public over time as part of its ongoing oversight of the BBC’s impartiality.
85.2 [Withheld from published minutes]
85.3 [Withheld from published minutes]
85.4 The Board agreed that the range of questions in the tracking survey should be revisited towards the end of the year.
86 UPDATE ON BBC NEWS’ COVERAGE OF THE EUROPEAN UNION
The Board considered an update on management’s response in March 2005 86.1 to the independent report, commissioned by the Board, on BBC News’ coverage of the European Union (EU).
Governors endorsed progress against the agreed actions and noted the 86.2 positive response to the appointment of Mark Mardell as Europe Editor and to the BBC’s recent coverage of European events.
Responding to Governors’ questions, management confirmed that the regular 86.3 editorial planning meetings on EU coverage and deployment would engage with the Nations & Regions more consistently going forward.
Governors requested a further update on progress in approximately six 86.4 months, including the Journalism Board’s conclusions regarding qualitative analysis as an alternative to numerical monitoring. Governors also asked that the results of management’s “informed citizenship” pilot be brought to the Board when available.
87 CONTENT SUPPLY REVIEW: IMPLEMENTING THE WINDOW OF CREATIVE COMPETITION
87.1 The Board considered management’s proposed implementation plans arising from the Content Supply Review.
87.2 Responding to points raised by Governors, management assured the Board that there was little risk of commissions from independents falling during the first year of the Window of Creative Competition (WOCC) because of the strength of the sector and confirmed that systems would be in place to demonstrate meritocracy, including oversight of the fair and transparent
6 operation of the system by a new managing editor of television commissioning.
87.3 In response to concerns from Governors whether sufficient commissioning expertise in sub-genres would exist when specialists in the production community were separated from commissioners, management explained that commissioners brought a broad knowledge of channel strategies and audience expectations to their role and also sought specialist advice as required. Commissioners would consider potential conflicts of interest when consulting specialists.
87.4 The Board approved the proposals, specifically:
- That the implementation plans for the WOCC and the in-house guarantees were designed to deliver fairness and transparency; - That the new commissioning structure delivered a commissioning meritocracy that was fair to in-house and independent producers; and - That implementation could proceed, with the new system in full operation in 2007.
87.5 The Chairman asked that the Board be kept updated of any issues arising with the independent sector over the coming months. As agreed at the May Board of Governors, management would prepare an interim report on content supply review implementation in 2006, ahead of the bi-ennial review of the WOCC to be conducted by the new BBC Trust.
88 THE CBBC CHANNEL: TONE AND PRESENTATION
88.1 The Board considered a report from management on the tone and presentation style of The CBBC Channel, which responded to comments raised in Professor Barwise’s review for the Department for Culture, Media and Sport of the BBC’s digital television services.
88.2 Management confirmed that, although the channel had received very few complaints since its launch, they continued to be vigilant about the channel’s tone and presentation, within the BBC’s Editorial Guidelines, and about meeting the expectations of its audiences.
88.3 Responding to comments from Governors, management confirmed that the channel was:
- Keeping a close watch on the use of bad grammar so as not to undermine standards of English; - Building on the its track record of factual programming and strong drama, and looking for more opportunities for factual entertainment; - Continuing to ensure that the style of comedy took into account wider issues in society, such as bullying; - Looking into using more presenters with specialist knowledge to add value to the programming and including feedback from audiences
7 when reviewing talent.
88.4 The Board endorsed management’s approach to tone and presentation style and the continuing overall performance of the channel.
89 BBC TWO STRATEGY UPDATE
89.1 In the Annual Report 2004/05, the Board endorsed the impact of the strategy for BBC Two approved by Governors in 2003 but noted that its implementation had not been without some cost in terms of audience numbers.
89.2 The update to the BBC Two strategy proposed by the Channel Controller positioned the channel in a portfolio of BBC television channels which anticipated the expansion of digital television and on-demand technologies. Management’s challenge was to build BBC Two in a way which was true to its heritage and fit for the modern age, particularly through more innovation across a range of factual programming, as well as drama and comedy.
89.3 During the discussion, issues covered included:
- The role of BBC Two in the portfolio; - Extending the reach and depth of the channel; - Applying modern factual techniques to specialist factual areas; - The role of BBC Two in the television portfolio; - Attracting young and ethnic minority audiences and the success of contemporary factual formats such as The Apprentice and Dragon’s Den in introducing new audiences to business; - The development of arts journalism through The Culture Show; - Coverage of sport on the channel.
89.4 The Board endorsed the proposals for the further evolution of BBC Two, which would be continue to be monitored as part of regular performance reviews of services.
90 AOB
90.1 The Board noted the update on progress of management’s Out of London review and that the proposals for Manchester due to the Board in the autumn would include costed options and a detailed risk analysis.
90.2 The Chairman briefed Governors on his and the Director-General’s last routine meeting with Chairman and Chief Executive at Ofcom.
90.3 All members of management, other than the Director-General, left the meeting.
90.4 The Chairman updated Governors on the recruitment of the non-executive
8 chairman of the BBC Commercial Holdings Board. The Board approved the appointment of Etienne de Villiers and agreed that the Remuneration Committee approve his remuneration.
91 ITEMS FOR NOTING
- Out of London: Update on Progress - Sale of BBC Broadcast - Ofcom Report - Charter Review Update - Report from the Board of Commercial Holdings held on 25 May 2005 - Management Reports - Documents for Sealing
The items were noted.
92 REPORTS/MINUTES FROM COMMITTEES OF THE BOARD OF GOVERNORS
- Report from the Audit Committee held on 7 June 2005 - Report from the Finance & General Purposes Committee held on 11 July 2005 - Minutes of the Governors’ Programme Complaints Committee held on: 27 January 2005 24 February 2005 17 March 2005 23 March 2005 28 April 2005 26 May 2005 16 June 2005
The reports/minutes were noted and adopted.
93 KEY ISSUES AND MINUTES FROM BROADCASTING COUNCILS AND THE ENGLISH NATIONAL FORUM
- Broadcasting Council for Scotland: unconfirmed minutes of the meeting held on 3 June 2005 - Broadcasting Council for Wales: unconfirmed minutes of the meetings held on 13 May and 10 June 2005 - English National Forum South West RAC: report from meeting held on 9 June 2005
The issues and minutes were noted.
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