Examination of Witnesses (Questions 284
- 299)
WEDNESDAY 13 JUNE 2007
MR GAVYN
DAVIES
Q284 Chairman: Welcome.
Let me explain. You remember, of course, we had previously been
carrying out a review on the BBC Charter and other issues and
the Committee has become more general and is now doing communications
generally. We are doing this particular report on the appointment
of the BBC Chairman really to examine the process by which the
Chairman is appointed, whether it should be scrutinised by Parliament,
and we want to look at a number of other issues, like the terms
of the contract and the rest. I wonder if I could start. We had
Michael Grade, who gave evidence to us. Of course, he was your
successor. He was asked about how the governors regarded their
duty to the licence fee payers and basically his reply was (and
I seek to quote from the minutes) that "the great advantage
of the Trust is that the Chairman of the Trust would feel very
clearly that its constitutional role was one removed from the
day-to-day operations of the BBC and be there to represent very
clearly the interests of the licence fee payers. That is not clear
in the previous model, it is not clear at all", and he was
asked by Lord Hastings on this further and he said of the governors,
"They assumed the position but there was no evidence to support
it. It was just the view of 12 good men and women true that they
were representing them, but they had no mandate." I just
wondered how that applied to your experience.
Mr Davies: My Lord Chairman, I definitely felt
the governors had a very clear mandate. The governors under the
old system were the embodiment of the BBC and, acting within the
Charter, they were actually able to do, almost without limitation,
anything they wanted to the organisation. As time passed and as
chances came and went, the role of the governors became more clearly
defined and, by the time I was operating in 2001 to 2004, there
was a significant amount of definition within the Charter that
I inherited. One of the first things I did, though, was publish
a paper on governance which said something a little bit similar
to what Michael had just said, not as specific and not as critical
about the governance system, but did say that we needed to be
clearer about what the mandate of the Board of Governors was and
how that was distinct from the mandate for the Executive Board.
I was determined to protect a situation in which the Board of
Governors were inside the BBC and were not a board of regulators,
but I did think that the public was becoming confused and concerned
about the lack of definition of their role and, in fact, I did
define the role more clearly and would have been happy if that
had been what had gone into the Charter.
Q285 Chairman:
But you never found any difficulty yourself, viewing your own
position, representing the licence fee payers?
Mr Davies: No, I extremely clearly thought we
were representing the licence fee payers and no other public entity
and, in particular, certainly not the Government or any other
political entity. So, I felt that we were the embodiment of the
BBC, responsible to the public and in charge of making it possible
for the BBC services to be run.
Q286 Chairman:
You did not feel there was any conflict between (as you once said)
standing together at a time like we saw in 2003 against government
pressure?
Mr Davies: Conflict between that and what, my
Lord Chairman?
Q287 Chairman:
Conflict between representing on the one side the licence fee
payers and on the other side simply representing the BBC?
Mr Davies: No, I mean, I never saw our task
as being flag-waving for the organisation, but in the pressure
that we were under from Number 10 at that time in 2003 I did feel,
and still do feel extremely strongly actually, that it was the
duty of the Board of Governors to stand up for the right of the
BBC to broadcast as it saw fit. Many people have said, "Yes,
but you broadcast the wrong thing." I personally do not happen
to believe that either. The point I was making to the governors
in that email was that there are only a few occasions in the BBC's
history where it is crucial to draw a line in the sand and to
tell the Government that we are not the organ of the state, we
are the organ of the licence payers; and I felt we were under
pressure at that stage to act as if we were the organ of the state.
Q288 Lord Hastings of Scarisbrick:
Mr Davies, good morning. If I may say so, it is a great pleasure
to see you in this Committee. Do you understand the distinction
between the role of the new BBC Trust and how you ran the BBC
governors?
Mr Davies: Yes. I think, Lord Hastings, the
distinction is one of nuance rather than a complete change. The
reason that I believe that the system can be made to work, even
though, in my view, it is not optimal, is that it is not all that
different in some respects from the old system. The main distinction
that I see is, I suppose, two things, one definitely positive
and one to me not so positive. The positive one is I think that
the responsibilities and powers of the Trust are better delineated
in the Charter, and I think that the responsibilities of the Executive
Board are also better delineated in the Charter. So, there is
a lot to be said for the new system in terms of clarity and transparency,
but that has come at a cost of greater separation between the
Trust and the Executive Board and perhaps also at the cost of
making the life of the Chairman somewhat more complicated. I believe
that a great deal of good was done by having a Chairman who was
not quite an executive but was in the BBC all the time. I took
it as pretty much---. It was really my full-time job, I was there
all the time, and when I shifted from being Vice Chairman, which
is very much a non-executive position, to being Chairman, which
is a full-time position, I certainly felt the difference and,
in particular, I felt able to really understand a lot more about
the BBC than I had previously understood from Board of Governor
meetings. I was able to talk to anyone I liked. I became extremely
close to many people in the BBC, as you remember. Some people
saw that as me being captured by the management. I saw that as
me doing my duty to understand the organisation root and branch,
and we will see with the new Chairman. I am sure that it will
not be a matter of black and white by any means, but my feeling
is that he will have a harder time fulfilling what I thought was
that part of the job now that he is outside the building (he is
in Marylebone Road) and he does not have the same functions vis-a"-vis
the Executive Board that I had. Remember, the functions that the
Chairman and the old Board of Governors had vis-a"-vis the
Executive Board included appointing them and paying them annually,
and it was extremely difficult for the Director General or the
Board of Management to ignore us when we had those powers.
Q289 Lord Hastings of Scarisbrick:
Do you feel, in the light of what you have just said, that because
the new trust arrangement does have a clear separation between
the role of the Trust and the role of the Executive Board, because
of the way you were able to relate to the programme makers, that
the licence payers' interest was better enhanced under the old
system than under the new system?
Mr Davies: Lord Hastings, I believe that but
I can also see the opposing points of view. Let me put the opposing
points of view first. The opposing point of view was that the
closer the Chairman and the Board of Governors got to the Executive
the more likely it was that there would be executive capture of
the Board. I have seen in many public companies in my time examples
where the management basically captures the Chairman and the non-execs
and there is a natural suspicion, fed by a lot of media comment
on the BBC, that that is happening. It happened, for example,
when we paid members of the Executive Board high salaries; it
happened when the Board of Governors found in favour of the Executive
rather than competition, who were lobbying or bringing cases to
the Board of Governors. So, there was definitely a risk under
the old system that we would be seen as being captured by the
management. On the other hand (and this is the advantage), we
did know, I believe, a heck of a lot more about what the BBC was
up to than an external regulator. We were able to adjust the behaviour
of the BBC long in advance of problems becoming public. I remember
in particular one instance which has never really come to light.
We made a very major decision leading to the disappearance of
one of the most senior people inside the BBC without that really
ever becoming a matter of public debate and consternation. That
is a bit old-fashioned, that is a system that, in my opinion,
works because the people making it work know that they are standing
for the public interest and that is their job, but in today's
world, where you need transparency, it was a system that was beginning
to lose some credibility.
Q290 Lord King of Bridgwater:
You had, obviously, very difficult experiences, for which I personally
have very great sympathy with you, over what happened over the
Hutton Inquiry and perhaps the failure of people to understand
publicly the barrage of pressure that has been coming from Number
10 over a considerable period of time, and which perhaps is illustrated
by some of the comments made by the Prime Minister yesterday about
24/7 news management, that resulted in the pressures which you
had at the time. Asking a hypothetical question, if we had the
new structure in place with the Trust, do you think the Chairman
of the Trust would have had to resign over that?
Mr Davies: I think it is less likely, my Lord,
but not impossible. If I may remind the Committee why I resigned,
it was not actually because I agreed with the Hutton Inquiry's
final verdict but because I believed that the fact of that verdict
made my continuing in office untenable, and particularly because
there was a licence fee settlement about to be negotiated between
the Government and the BBC, and I still defy anyone to know how
I could have negotiated that settlement believing what I believed
about the Today Programme report. So, that is why I resigned.
Lord Hutton saw fit to make absolutely no distinction between
the Chairman of the BBC, the Director General (who, incidentally,
he forgot to call at one point to give evidence, maybe forgetting
that he was editor-in-chief), the Director of News, the producer
of the Today Programme, the journalist who made the broadcast.
He couched his report as criticising the BBC, and I thought that,
since I was head of the BBC, I had no option but to resign over
this.
Q291 Lord King of Bridgwater:
I think you are the only person in the country who thought the
Hutton Report had severe limitations, but can I just ask you this.
You gave us evidence, and your predecessors gave us evidence as
well, and I think I am right in saying that not one of them thought
that the new structure was a good idea. The only person who thought
it was a good idea was the Chairman we had, who was a Chairman
who resigned shortly thereafter having told us he could make the
system work. You talked about leadership as the Chairman, the
need to be involved and ultimately take responsibility for the
totality of the BBC, which I call leadership as the Chairman.
In the future, in the public mind, when people want to complain
about a programme, something that is going on in the BBC, and
they write to the Chairman, who do they think is the Chairman
of the BBC?
Mr Davies: My Lord, the Chairman is very clearly
Michael Lyons. I do not think the Committee should be in doubt
about that.
Q292 Lord King of Bridgwater:
But, with respect, the most likely comment and criticism will
be, as you know, programme content, editorial actions of one sort
or another and actually, if you write to Sir Michael Lyons and
he has no authority over that, he must transfer that. Surely it
is the responsibility of the Chairman of the Executive?
Mr Davies: The Chairman of the Executive, as
I understand it, is the Director General.
Lord King of Bridgwater: Certainly.
Chairman: Although not necessarily.
Q293 Lord King of Bridgwater:
He is. Not necessarily, but he happens to be.
Mr Davies: Yes. I think a mistake that could
have been made in the Charter and was avoided was to have another
Chairman of the BBC sitting as the Chairman of the Executive Board
with the Director General sitting under him. I think that would
have been really confusing then. In terms of a complaint, it was
typical under the old system for most complaints to be handled
by the editor-in-chief, the Director General. Only if they were
very serious complaints, and I think raised somewhat wider questions
than simply one programme, did the Board of Governors as a body
tend to look at them, but, of course, the Board of Governors did
have its own complaints process as well and you could complain
to the Board of Governors complaints process. We never quite got
the complaints system as transparent and clear as I would have
wished, and I am not actually sure that has happened yet, because
listeners and viewers often will complain to the producer, they
will complain to the person whose face is on the programme, they
may complain to the governors or the Chairman and they may complain
to the Director General. So, complaints come in all over the place,
but what everyone needs to be clear of is that the entire system
is able to respond both to a specific complaint and to the wider
connotations of that complaint.
Q294 Lord King of Bridgwater:
So, if a member of the public comes to me and says, "I think
that programme last night was an absolute disgrace; I think Panorama's
treatment of this particular issue is quite wrong. I want to write
to the Chairman about this", who should he write to?
Mr Davies: In that particular case, I would
advise him to write to the Director General, maybe copying the
Chairman, but if he has a complaint about the way that BBC One
is fulfilling its public service remit, for example that Panorama
is not acting in line with that remit, then it is definitely a
Trust matter.
Chairman: Let us move on to the process
of appointment, can we. Lord Maxton.
Q295 Lord Maxton:
Obviously, with your resignation and Michael Grade going and then
a period when there was no Chairman, there has been some public
discussion about the Chairman and the appointment of the Chairman.
Could you perhaps just tell us by what process you were selected
as the Chairman? Were you asked to do the job? You were Vice Chairman,
but how did you manage to get into these two positions?
Mr Davies: The Chairman at the time resigned.
He had been approached to go and become the Chairman of BT, Christopher
Bland, and I was Vice Chairman. I decided to apply. The process
was, for the first time, a public appointments process. I think
Christopher and Marmaduke Hussey and others had been appointed
by a telephone call from the Home Secretary, in general, but for
the first time my process was a public appointments process. The
application went to the DCMS, it was vetted by a committee chaired
by a DCMS official who happens to be in this room, Nicholas Kroll.
They recommended, I believe, one name, although I am not certain,
to the Secretary of State. She recommended the name to the Prime
Minister and the Prime Minister made the appointment. I took the
view that I had emerged from a public appointments process, and
actually that was very important to me because there was much
criticism about my appointment on the grounds that I was some
kind of a lackey for either Gordon Brown or Tony Blair or almost
anybody.
Q296 Lord Maxton:
But not both!
Mr Davies: At the time I think it could have
been both actually, yes.
Q297 Lord Maxton:
You were not invited to apply as such?
Mr Davies: I was not invited to apply, although
I must say that I think sitting there as Vice Chairman probably
made it likely I was going to apply.
Q298 Bishop of Manchester:
Mr Davies, you know from the previous Charter Review Committee
that we spent quite a lot of time considering the process whereby
future chairmen might be appointed, and if I can quote, we said,
"The Chairman of the BBC should be chosen on the basis of
a recommendation by a truly independent panel", and the make
up of that panel was to have been a majority of non-political
members and then the balance made up by people with particular
political viewpoints and allegiance. Let me say that the panel
should be chaired by a non-political member who is not a civil
servant. I just wondered what your own view was of that area of
recommendation that the previous committee made.
Mr Davies: I completely agree with your recommendation.
I believe that it is crucial to have an independent board. It
may be important actually to have that board make its recommendation
public, but I think that the final decision should remain with
the Prime Minister. If the Prime Minister chooses to make an appointment
which is not recommended to him by the Board, then that is a matter
for him. So, I think your procedure is exactly right. Whether
it needs to be chaired by a non-civil servant, I am open about.
Q299 Bishop of Manchester:
What would your alternative to that be then as an ideal?
Mr Davies: My selection panel was chaired by
a senior civil servant—because it chose me, I think it was
an excellent panel—but I suppose ideally it would have been
chaired by somebody with external standing and name recognition,
and I think that would make the system more robust.
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