The BBC Worldwide Board is responsible for ensuring that the
company, BBC Worldwide Limited, continues to support its
shareholder and parent, the BBC. It does this by delivering
sustainable returns while at the same time providing both the BBC
and the wider UK creative community with an internationally
recognised export platform. Fundamental to our role, however, is
the overriding obligation to ensure that, at all times, the BBC
brand and its reputation is protected in all respects. The
governance of the Board and the company has been designed with
these principles in mind.
As a matter of best practice, BBC Worldwide aims to comply with the
UK Corporate Governance Code (the 'Code') for listed companies.
However, as a wholly-owned subsidiary of the BBC there are
inevitably some areas of compliance that are less relevant. For
example, while we do not hold an annual general meeting with our
shareholder, there is, however, an ongoing dialogue with views
shared in an open and transparent environment.
The Non-executive Directors include both independent directors and
BBC Public Service employees who represent the BBC as shareholder.
As a consequence, compliance with the specific provisions of the
Code requiring a committee to have a majority of Independent
Directors has not been achieved. I believe the committee membership
is appropriate given the position of BBC Worldwide within the wider
It is my intention to appoint one of the independent Non-executive
Directors who currently sit on the BBC Executive to the BBC
Worldwide Board in the role of Senior Independent Director. This
will resolve this current non-compliance with the provisions of the
Code. Post-year end, it was agreed that the third Public
Service nominee on the BBC Worldwide Board will be the BBC's
Head of Vision, George Entwistle.
Although there has been no formal evaluation of Board performance,
the changes that have occurred during the year have enabled me, as
incoming Chairman, to review both the effectiveness and
composition of the BBC Worldwide Board.
The company's thanks to outgoing Directors are noted in my
introduction to this Annual Review. Robert Webb QC's recent
decision to accept a full-time role with Rolls-Royce plc allowed me
the opportunity to streamline decision-making and agree with the
Chairman of the BBC Trust that the Director-General should, in
future, chair our most significant commercial
Chairman, BBC Worldwide and Director-General, BBC
BBC Worldwide's governance framework
Role of the Board
The Board is responsible for setting the strategic objectives
for the company and for monitoring progress against those
objectives. The Board reviews both business and financial
performance with a view to ensuring that the company has sufficient
resources to execute the strategy effectively. The Board is
accountable to the BBC for generating sustainable long-term value,
while balancing both investment performance and returns in the form
of dividends. The investment guidelines (the company's policies for
approving investment and expenditure) provide the framework for
controlling the governance processes and providing clearly
delegated authorities and robust processes.
The Chairman and Chief Executive
There is a clear separation of the roles of the Chairman and the
Chief Executive, which is set out in writing and has been adopted
by the Board. A copy can be found on the BBC Worldwide
website. The Chairman's principal role is to lead the Board
and to ensure that it works effectively and through its various
The Chairman is also responsible for setting the Board agenda
and promoting a culture of healthy debate and challenge. For 11
months of the year Robert Webb QC was Chairman, and also a
Non-executive Director on the BBC Executive Board. On 12 March
2012, the Director-General of the BBC, Mark Thompson, was appointed
as the Chairman of the BBC Worldwide Board. The terms of the
employment contracts for the Chief Executive and Chief Financial
Officer are set out in the Remuneration
The independent Non-executive Directors serve initially for a
term of two years which may be extended subject to satisfactory
performance and agreement from the shareholder. The public service
Non-executive Directors are our shareholder's nominees on the BBC
Worldwide Board. Zarin Patel does not have a fixed term
appointment. The public service Non-executive Director appointments
may be replaced at any time by the shareholder.
Re-election of Directors
As a wholly-owned subsidiary of the BBC, there is no requirement
for the Directors to seek annual re-election; nor do we hold a
formal annual general meeting. The company is required to
present an annual review of performance to both the BBC Trust and
the BBC Executive.
The Board considers each of the Non-executive Directors to be
independent in character and judgement. Charlotte Hogg and Tim
Weller do not have any relationships or circumstances which are
likely to affect or could appear to affect their judgment and are
therefore considered to be totally independent. Mark Thompson and
Zarin Patel are employees of the ultimate shareholder.
The company maintains liability insurance for its Directors and
Officers which is renewed on an annual basis. The company has also
entered into deeds of indemnity with its Directors.
All Directors have access to the advice and services of the
Company Secretary who acts as Secretary to the Board and its
committees. The Company Secretary is accountable to the Board for
ensuring that Board processes and corporate governance practices
are followed. Directors are also given access to independent
professional advice at the company's expense where they
consider such advice is necessary to enable them to fulfil their
responsibilities. The Company Secretary is Jane Earl.
Board composition and appointments
On 29 February 2012 Robert Webb QC retired from the Board having
served as Chairman for nearly two and a half years. Nicholas
Eldred, who was one of the BBC Public Service nominated Directors,
retired from the Board on 31 October 2011.
The Davies report has recommended that FTSE 100 companies should
aim to have a minimum of 25% female representation on their boards
by 2015. BBC Worldwide has exceeded this threshold and recognises
the value of diversity in all respects.
On joining the Board, most of the Directors undertook a formal
induction programme. This is designed to give them an understanding
of each of the strategic objectives and how these will be delivered
within the context of the governance structure.
The current members of the BBC Worldwide Board, as of 31 March,
are shown on the Board page together with details of
their external commitments.
3. How the BBC Worldwide Board operates
The Board has a schedule of matters reserved for its attention
and the Company Secretary also maintains a forward agenda of
matters requiring discussion and/or approval.
At each Board meeting the Chief Executive presents his report on
all aspects of the company's strategy and performance in the
presence of the BBC Worldwide Executive Committee (WEx). Each of
the Managing Directors has the opportunity to attend Board meetings
and to comment on their business performance and make presentations
to the Board on specific initiatives. During the year the Board has
received in-depth presentations from the US business, Consumer
Products and an update on Showcase from Sales & Distribution.
The Directors also visited MediaCityUK in Salford for one meeting
this year which enabled the Board to hear from colleagues in BBC
North and explore complementary strategic initiatives.
Financial and risk management
The Board receives regular updates on the company's financial
position; agrees the budget; and monitors risk management and
financial controls. One issue which has received regular monitoring
has been the ongoing concerns relating to the Eurozone financial
markets and the implications for trading conditions. The restricted
access to the debt market and the limited availability of headroom
was also monitored and, as a result the Board asked for greater
visibility of cash flow and hedging. As a standing item, the Chair
of the Audit Committee reports to the Board on matters discussed at
the Audit Committee meetings.
During the year the Board has played an active role challenging
the Executive in the formation of the refreshed strategy as
referred to in the CEO's report . This was developed and
discussed over the course of several substantial sessions. The
Non-executives were active participants, drawing on experience in
the commercial world, to challenge and inform the debate. The Board
analysed the opportunities available in both the business streams
and the regions, conscious of the regions available for investment.
Performance of the Global BBC iPlayer pilot has been monitored
together with plans for developing an e-commerce business while
preserving value in our physical formats.
The strategy for the Live Entertainment business has been
examined with a focus on international growth and investment.
In accordance with the investment guidelines, the Board approves
transactions where the value is in excess of £5.0m or any
transaction involving the acquisition of equity.
During the year, the sale of the majority of the Magazines
business to Immediate Media Co was monitored by the Board, ensuring
that appropriate governance arrangements were in place for the
ongoing licensing business. In addition, the Board has been
constantly apprised of discussions relating to our joint
venture with Ragdoll and several smaller transactions. Special
Board meetings are called where necessary to review specific detail
of transaction and approve any legal documentation which requires
People and succession
The Board has taken a particular interest in the evolving People
and Organisation strategy which has been determined during the
year. The Board has been consulted with regard to the appointment
of Martyn Freeman as General Counsel, Daniel Heaf as MD Consumer
Digital and Deborah Rowland as People Director.
The Board delegates to its committees as set out below.
During the year under review, the Nominations Committee was
initially chaired by Robert Webb with Nicholas Eldred and John
Smith as members. The Committee is responsible for reviewing the
composition of the BBC Worldwide Board and for recommending new
Non-executive Directors to the Board.
Under the terms of reference, the appointment of the Chairman
and the Chief Executive are conditional upon the specific approval
of the Director-General of the BBC with the support of the BBC
Trust. The appointment of the Director-General as Chairman was
endorsed by Lord Patten, Chairman of the BBC Trust.
The Company Secretary supports the activities of the
The Committee did not meet during the financial year under
The Code recommends that the Remuneration Committee should
comprise three independent Directors. Prior to his
resignation, Robert Webb QC chaired the Committee and Charlotte
Hogg and Zarin Patel were also members. Again it is our intention
to be as compliant with the Code as is appropriate with our status
as a wholly-owned subsidiary of the BBC.
The duties of the Committee include determining the framework
for the remuneration of the Chief Executive, CFO and WEx to ensure
that members of the Executive management are provided with
appropriate incentives to encourage enhanced performance in a fair
and responsible manner. The Committee regularly reviews the
appropriateness and relevance of remuneration policies as well as
the individual packages of each WEx member.
The Committee also approves the design of, and determines
targets for, performance related pay schemes and any
long-term incentive programmes. It is responsible for
establishing the criteria for selecting, appointing and setting the
terms of reference for remuneration consultants who advise the
Committee. The Committee is responsible for ensuring that members
have reliable and up-to-date information about remuneration in
other companies, particularly in the media environment.
A full report of the remuneration policies
and activities of the Committee can be found here.
The Company Secretary and the People Director support the
activities of the Committee and attend every meeting by
Please see the table below for details of the Remuneration
Committee attendance during the financial year under review.
BBC Worldwide Executive Committee
The BBC Worldwide Executive Committee (WEx) meets weekly and is
chaired by John Smith. In addition to the CFO, members of WEx are
shown here. The Company
Secretary also attends and supports the activities of the
WEx takes responsibility for all aspects of the company's
activities as delegated to it by the Board and for devising and
implementing the strategy which it proposes to the Board for
approval. Every week, WEx concentrates on market, competitor and
technology developments and these are supplemented with
detailed presentations and workshops on new and future technology
innovations such as mobile gaming, social networks and branded apps
which will all impact our businesses in the future. The progress of
the Global BBC iPlayer pilot which has been launched in 16
countries continues to be reviewed and examined. Customer
relationship management (CRM) has also been a significant focus
during the year.
Regular updates are delivered to the Committee on our top
brands, which this year have included Top Gear's achievements in
the US market, future series of Doctor Who and global productions
of Dancing with the Stars. WEx also reviewed a Brand Tracking
survey which captured and tracked genre perceptions, awareness
metrics, brand values and linkage to the BBC in comparison to four
major competitors. Other regular updates included advertising sales
performance, editorial policy, data protection and information
security, mandatory training requirements for all staff and the
Social networks are becoming increasingly important to media
companies, brands and audiences. As a result WEx has received
presentations and opportunities to use social media to build new
audiences, build direct relationships with customers, promote
existing products and develop new ones, target new customers and
protect our reputation. One of these opportunities included an
equity investment in Viki.com, which provides a platform for avid
fans to publish popular TV and movie titles which they have
translated into over 150 languages.
Reviewing and refreshing the global strategy for the Company
alongside the five year business plan has been one of the major
initiatives for the year. Five work streams have also been
established, led by WEx members, and engaging a wider leadership
group, to determine our organisation and people plan required to
deliver the strategy.
The BBC's and BBC Worldwide's mission is to 'inform, educate and
entertain' which has led WEx to investigate the use of our
knowledge-rich BBC content to teach English to children in a fun
and interactive environment.
WEx members travelled extensively in order to promote the
continuing global growth of the company, with trips to Abu Dhabi,
Asia, Latin America, Australia, New York and Los Angeles. New
regional EVPs for EMEA, Asia and Latin America have been appointed
with responsibility for providing regional business plans
focusing on medium-term growth in each region.
Our People strategy is fundamental to the success of our
business. As such, time has been dedicated to reviewing not only
our HR systems but also top performers and appropriate frameworks
for pay and reward; succession planning; training and development;
as well as investigating how our values are embedded within the
culture of the company. The Aspire programme, which targets and
offers aspirational employees a year-long development programme
with a WEx member as mentor, has now been launched in both the UK
and the USA and is delivering value to the company.
WEx delegates to the Content Investment Committee, which is
responsible for approving programme and product investments of
between £0.5m and £2.0m, and to the Investment Review Group, which
approves other financial commitments between £1.0m and £2.0m. Both
these committees are chaired by the CFO. Each business has
authority for approving non-content budgeted spend up to £1.0m.