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Chairman's Introduction
ETIENNE DE VILLIERS
2007/08 has proved to be another exemplary year for
BBC Worldwide – clearly firing on all cylinders, it continues to drive every ounce of value back to its parent, the BBC.
In the first year of its five-year growth strategy it has delivered another substantial increase in profit, despite making significant
investments in new businesses, and has also seen sales rise by 13%. The company’s first major acquisition, a controlling stake in the Lonely
Planet travel information group, and the launch of bbc.com were defining moments in a very busy year.
But the financial performance is not the only success story. On 1 January 2007 the BBC’s new Royal Charter came into force and with it a new
set of parameters for the Corporation’s commercial activities. The four commercial criteria set down by the Charter provide an essential framework
for BBC Worldwide, not just in guiding what it does, but also how it does it. For me it has been a pleasure to work with John Smith as CEO, Sarah
Cooper as COO, and the rest of the Board and governance team to oversee the bedding in of this framework.
This has been the first full year of operation with the formal application of the four commercial criteria. These require that we must be able to demonstrate to
the BBC Trust that all our services:
- are commercially efficient;
- fit with the BBC’s public purposes;
- do not jeopardise the good reputation of the BBC or the value
of the BBC brand;
- comply with the Fair Trading Guidelines and do not distort the market.
These criteria lie at the heart of our operations as a company, and compliance is assessed as appropriate by the BBC Worldwide Board and the BBC’s Executive Board.
The BBC Trust holds the BBC Executive accountable for such compliance. A formal compliance report was completed for 2007/08 and was accepted by
the BBC Worldwide Board as a fair and accurate appraisal of the company’s compliance with the four criteria. These are now firmly built into the
company’s DNA, and ongoing training and development work will continue to cement the framework in place.
There are clearly some important challenges ahead for BBC Worldwide – the downturn in the world economy, balancing the need for growth against the target of improving margins
and how to deliver long-term value to the BBC.
As with any media company, we must both invest in new digital businesses whilst also protecting the revenues from our core activities – activities which are still delivering growth.
Investment in localisation of content and carefully targeted marketing will also become increasingly important as we seek to expand the presence of
the BBC brand in new international markets. Furthermore, with competition for content increasing around the world, we need to ensure that our supply
of rights is secure. What is uppermost in my mind, however, is the task of growing and keeping our consumer base in an increasingly competitive
marketplace. If we do not do that effectively, we cannot hope to prosper. To that end, I believe the company has been right to spend time examining
the essence of its consumer proposition, and this work will continue into 2008/09.
It only remains for me to note my admiration for the way in which John Smith, his team and the Board have worked to set the new strategy in
motion. The results speak for themselves, and the focus and energy I have witnessed over the past year bode very well for the future.
Etienne De Villiers
Non-executive Chairman, BBC Worldwide