Take a look at the NEDs

Barclays chairman Marcus Agius and National Trust DG Dame Fiona Reynolds Barclays chairman Marcus Agius and National Trust DG Dame Fiona Reynolds are non-executive directors on the BBC Executive Board

Sometimes it takes a bit of distance. It took years of friends telling me that David Bowie's hard rock diversion was rubbish before I (grudgingly) accepted that Tin Machine was a blot (an interesting one, mind) on the great man's back catalogue.

It's much the same for our top execs. Steeped in BBC culture and content as they often are, it might take the dispassionate views of wise folk from other industries to help them reach the right decisions.

At least, that's what the politicians thought when they drafted the current BBC Royal Charter, which came into effect in 2007. It required, for the first time, non-executive directors to sit on the BBC's executive board beside senior salaried employees like Mark Thompson, Caroline Thomson and Helen Boaden.

Lord Fowler Lord Fowler struggled to get his head round the role

In the early days, the nature of the role seemed a bit of a conundrum to some, as Lord Fowler suggested when he chaired a Select Committee discussion on the subject back in 2005. Non-executives on the executive board 'does sound a contradiction in terms', he ventured, while 'a non-executive on a day-to-day board does seem to be a very difficult concept to get your mind round'.

High calibre applicants

If the Charter itself didn't exactly help him out by defining the role with any clarity, the gist was that NEDs would bring objectivity, experience and expertise - gained over successful careers - to the board, which would assist the executive directors in deciding how best to run the BBC.

A vague job description didn't deter some high calibre applicants. Marcus Agius was the BBC's first non-executive director, appointed ahead of the Charter in 2006. The chairman of Barclays is one of six NEDs - three of whom joined the board this year. They came with backgrounds in finance, technology, telecoms, online shopping and the charity sector and have held top jobs at the likes of BT, Amazon, National Trust and Virgin Entertainment.

With Agius paid £47,000 by the BBC in the last financial year, some regard NEDs as a relatively cheap way to bolster the board's effectiveness. It doesn't seem a lot of money, for instance, to be able to pick the brains of the Barclays chairman on financial matters or to grab a second opinion on change management from someone who's led the transformation of the National Trust.

Mark Thompson believes the BBC will 'benefit enormously from the wealth and variety of expertise' the NEDs bring, as Delivering Quality First commitments are delivered.

Creativity the draw

BBC NEDs are contracted for 28 days a year for renewable two year terms (Agius is now serving his second three year term). So what attracted the businessman, whose day job at Barclays pockets him around £750,000 a year, to a bit part at the BBC?

'The overwhelming attraction was the BBC itself,' admits Agius, who is now the board's senior independent director. 'The enormous respect (and affection) I have always had for the BBC has only grown as I have learned more about the range, depth and quality of its creative output, particularly when compared with what is on offer elsewhere around the world.'

Start Quote

Bringing in fresh minds with experience in the commercial world who are prepared to challenge and debate the items under review has, I believe, added real value to the Corporation”

End Quote Marcus Agius Senior Independent Director, BBC Executive Board

If its creativity is the draw, Agius knows that his worth to the Corporation lies in his City experience, including a long stint at investment bank, Lazard London. He chairs the board's sub-committee on Remuneration - although the fact that Agius awarded the chief executive of Barclays a cool £6.3m last year shouldn't get senior BBC execs too excited. Their pay packages must be established in line with a strategy set by the BBC Trust.

'The BBC is a substantial concern by any number of measures and the executive board routinely has major decisions to make,' Agius tells Ariel. 'Some of these are commercial in nature despite the fact that the BBC is essentially a spending organisation. Bringing in fresh minds with experience in the commercial world who are prepared to challenge and debate the items under review has, I believe, added real value to the Corporation.'

Fees set by Trust

His own experience at Barclays during the financial crisis benefited from a board with strong, independently minded NEDs, he continues. 'The BBC is no different from other organisations in facing a range of challenges, threats and opportunities and I am glad to have been able to play a part in helping the Corporation take its governance procedures to another level.'

Speaking of governance, the BBC Trust approves the appointment of all non-executive directors, who are proposed by a nomination committee that must comprise a majority of non-executive members. The NEDs' fees are set by the trust and are roughly matched with the rates paid by other UK corporations. Those who chair sub-committees receive an additional fee, while the BBC pays their expenses.

The NEDs meet with the trust regularly, providing the governing body with oversight and assurance on matters like executive pay, fair trading, value for money, commercial activity and executive director performance.

Agius says his diary is fairly flexible and that he can comfortably combine BBC work with his other commitments, even though Sunday nights are often not his own. 'The fact that the BBC executive board normally meets on a Monday invariably means Sunday evenings are spent reading,' he muses.

Start Quote

How to reconcile the strengths of this great British institution with all the demands of this new world is a fascinating task”

End Quote Dame Fiona Reynolds BBC Non-Executive Director

Dame Fiona Reynolds, who was appointed to the board at the start of this year, is finding it more of a challenge to fit the BBC into a schedule that is ruled by her director-generalship of the National Trust - a position she has held for more than a decade but which she has recently announced she will leave when her successor is in place.

'Very British'

'I always have to be very disciplined about time and focused on the task in hand,' she explains. 'Since joining the board I've delegated more internally, which is good for people at the National Trust too. I'm loving it.'

The woman who led a programme of change at the conservation organisation reckons the BBC shares many of the same attributes and challenges - 'being in the public eye, very British, needing to change yet always meet its core purpose.

'So how to reconcile the strengths of this great British institution with all the demands of this new world is a fascinating task,' she says.

Coming from the charity world, she says, equips her too with 'a good sense of accountability to the nation and the issues of trust and public service.

Brian McBride Brian McBride, former Amazon MD, is a BBC NED

'What I always try to do is remember the big picture - the 'why'? - at the same time as shaping the pragmatic decisions that are needed to help us manage through difficult economic times.'

No fewer than four

Other newcomers to the board are Sally Davis, previously CEO of BT Wholesale, who is also a non-executive director of Telenor, Logitech and the Department for Transport. And Brian McBride, former managing director of Amazon.co.uk, who is currently chairman of MX Data and a non-exec director of Computacenter and Monitise.

They join Simon Burke, a former chief exec of Virgin Entertainment Group, chairman and chief exec of Hamleys and current chair of HobbyCraft, and Mike Lynch, a technology entrepreneur, founder and current CEO of software company Autonomy and non-exec director of Isabel Healthcare, on the board.

The Charter stipulates that the NEDs are never fewer than four, nor equal to or in excess of the number of executive directors on the board.

Murdoch on the market

It's doubtful that a shortage will arise. Being a NED is a career choice for many - the Financial Times even has a Non-Executive Directors Club to match members with suitable appointments.

Even James Murdoch might be on the market. A former GlaxoSmithKline NED, he swapped his chairmanship of BskyB this week to become a non-executive director on the board.

Now there's a man who could offer the DG an alternative view.


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