麻豆社

The 麻豆社 Trust today announced a series of changes to the governance arrangements for 麻豆社 Worldwide.

As part of its review of the 麻豆社’s commercial activities the Trust has agreed a revised governance framework within which the 麻豆社 must operate its commercial activities.

These changes are designed to strengthen the oversight of the 麻豆社’s commercial operation and ensure even greater clarity and confidence in the separation of the 麻豆社’s public service and commercial activities.

Among the changes agreed are:

• the 麻豆社 Worldwide Board, which is a subsidiary board of the 麻豆社’s Executive Board, will become smaller and more focussed on the delivery of a rolling three year commercial strategy agreed by the Trust
• the new chairman of the 麻豆社 Worldwide board must be a non-executive director from the 麻豆社’s Executive Board – thereby strengthening the link between the two boards and the role of the 麻豆社’s public service arm as the shareholder in the company
• there will be changes to the membership of both the 麻豆社’s Executive Board and the Worldwide Board in order to reduce the potential for conflicts of interest. Specifically, the Chief Executive Officer of 麻豆社 Worldwide will no longer be a member of the 麻豆社’s Executive Board and staff from 麻豆社 Vision (who produce most of the 麻豆社 content subsequently sold by Worldwide) will not be eligible to be members of the Worldwide Board. This will result in Jana Bennett stepping down from the 麻豆社 Worldwide Board.

These changes will bring the business further in line with the Combined Code on Corporate Governance. The Trust has also stipulated that it expects 麻豆社 Worldwide to operate as far as possible within the principles set by the Code, and any deviation from it needs to be agreed by the 麻豆社 Trust.

This new governance framework for 麻豆社 Worldwide, proposed by the Executive Board, will be stipulated in the Trust’s protocols. The 麻豆社’s Executive Board, led by Director-General Mark Thompson, will be responsible for ensuring compliance with it. The changes will come into effect from 1 October 2009.

In addition to the above changes, the Trust has decided that the financial threshold for referral of transactions for Trust approval should be lowered from £50m to £30m and the Trust will retain the ability to scrutinise any activity that it believes is not consistent with the strategy it has agreed.

Sir Michael Lyons, Chairman of the 麻豆社 Trust, said:

"The 麻豆社 Trust believes that these changes will strengthen the ability of 麻豆社 Worldwide to deliver value to licence fee payers through the return it makes on content owned and paid for by licence fee payers. The changes also respond to concerns raised by commercial competitors and others.

"These changes build on the principles set out in the interim conclusions of the Trust’s commercial review, in which we set out our vision for a focussed 麻豆社 Worldwide that is more closely aligned with the 麻豆社’s public purposes. There will be no delay in progressing that objective although we must await the outcome of Government’s Digital Britain review.

"Mark Thompson is right to say that in the longer term the 麻豆社 will look at whether Worldwide needs to be 100 per cent owned by the Corporation. However, the Trust won’t contemplate any loss of direct control over 麻豆社 rights created as result of investment from the licence fee payer."

The appointment of a new Chairman of the 麻豆社 Worldwide Board will be for the 麻豆社’s Executive Board to make; the current Chairman’s term ends on 30 September.

This concludes the governance aspects of the Trust’s review. The Trust aims to report on the remaining elements of the review following clarification of the outcome of the Digital Britain consultations.

Notes to editors

麻豆社 Worldwide

麻豆社 Worldwide is the 100 per cent owned commercial subsidiary of the 麻豆社. The purpose of the company is to enable the 麻豆社 to maximise the value generated by content owned and paid for by licence fee payers.

The new governance framework

The framework agreed by the 麻豆社 Trust is as follows:

The 麻豆社 Worldwide Board is a subsidiary of the Executive Board; it is responsible to the Executive Board for its actions. The Executive Board is responsible to the Trust for the effective operation of 麻豆社 Worldwide, including the operations of that Board. The Trust sets the following framework for the operation of the 麻豆社 Worldwide Board:

• The 麻豆社 Worldwide Board should be between 8 - 12 members
• The Chairman of the 麻豆社 Worldwide Board must be one of the non-executive directors of the 麻豆社's Executive Board
• There shall be a broad balance between 麻豆社 Worldwide executives, independent non-executives and 麻豆社 public service non-executives on the 麻豆社 Worldwide Board
• The 麻豆社 public service non-executive members of the 麻豆社 Worldwide Board can not include a person who principally works within 麻豆社 Vision.

It is the responsibility of the Executive Board to make appointments to the 麻豆社 Worldwide Board consistent with this framework, agreed by the Trust. Following any appointment being made to the 麻豆社 Worldwide Board, the Executive Board must inform the 麻豆社 Trust, including the conditions upon which this appointment was made.

The Trust’s review of the 麻豆社’s commercial activities

In July 2008, the 麻豆社 Trust launched a review of the Corporation’s commercial activities, looking at 麻豆社 Worldwide's mandate, strategy and governance arrangements. The agenda and timetable for this review have been complicated by a number of major external events, including ongoing discussions between Channel 4 and 麻豆社 Worldwide about a potential joint venture and the PSB/Digital Britain debate.

It was agreed by the Trust that some aspects of the review can continue as they are unaffected by these events, and this marks the conclusion of the governance part. The Trust aims to report on the remainder of the review following clarification on the outcome of the Digital Britain consultations.

The review of commercial activities has two goals. First, to make sure that 麻豆社 Worldwide's strategy is properly aligned with the 麻豆社's public service interest and impacts positively on the 麻豆社's brand and reputation. Second is to ensure that in its strategy and operations 麻豆社 Worldwide is duly sensitive to the concerns of other commercial players in the market.

In March, the Trust set out its emerging thinking on the review:

• The Trust should bring greater clarity to the direction, parameters and strategic priorities of 麻豆社 Worldwide's commercial activities in the UK and overseas, to ensure that they align properly with delivery of the 麻豆社's public purposes
• The Trust should make changes to 麻豆社 Worldwide's detailed control framework to establish a more contained focus for its operations
• None of this cuts across the Trust’s ambition for 麻豆社 Worldwide to maintain and develop its commercial vigour and strength. In the Trust’s view this is perfectly compatible with a challenging remit and clearer parameters for its operation and strategic focus.