[Page 2 of 6] Corp Governance Report
How The Board Operates
The Board holds scheduled meetings at least 11 times during the year, including a specific meeting to direct and agree overall
strategy. Board meetings follow a formal agenda covering regular reports from the Chief Executive, Chief Financial Officer and Managing
Directors of the company’s businesses. Senior managers attend as required.
Matters considered by the Board will include:
- declaration of dividends;
- approval of strategy;
- review and authorisation of major transactions or contracts not in the ordinary course of business;
- review of risks and controls;
- assessment of the functioning of the Board and its various
sub-committees;
- review and approval of the Annual Report and Accounts;
- compliance with the four commercial criteria and commercial protocols;
- approval of remuneration policy for staff, excluding Board Directors;
- monitoring legal, regulatory and environmental policy matters.
The Company Secretary assists the Chairman and ensures that the Board is supplied with the information necessary
for its consideration on a timely basis.
In addition, the Non-executive Directors have the opportunity to meet in the absence of the Executive Directors at any
time they feel appropriate.
The Company Secretary comprehensively briefs Directors on their responsibilities on appointment to the Board. In addition, Board
members are able to seek independent professional advice, at BBC Worldwide’s expense, regarding their responsibilities at any time.
Certain Executive Directors are also appointed to the Boards of various joint-venture and associated undertakings as appropriate, and
participate in the overview and management of those ventures. The Board has delegated responsibility for certain functions to the BBC Worldwide
Executive Board, BBC Worldwide Audit Committee and BBC Worldwide Content Investment Committee. However, the Board takes direct responsibility for
the review and monitoring of key areas such as risk management and for approving all content investments over £5m and all new business proposals.
Matters delegated to management include the day-to-day operation of the business, implementation of the strategy approved by the Board and
implementation of risk-management practices. Further information on the BBC’s Executive Board and the BBC Trust is available in the BBC Annual
Report and Accounts.
EXECUTIVE BOARD
The Executive Board is chaired by the Chief Executive and all the Executive Directors are members. It deals with certain operational matters delegated to
it by the Board, within clearly defined approval limits. The Executive Board meets weekly and has day-to-day responsibility for managing the operations of the
business, devising and implementing strategy agreed by the Board, the identification and management of risk, and for providing assurance to the Board.
ACCOUNTABILITY AND INTERNAL CONTROL
The Board has overall responsibility for maintaining an adequate system of internal control and for reviewing its effectiveness.
Such a system is designed to manage, rather than eliminate, the risk of failure to achieve business objectives and can provide only
reasonable, but not absolute, assurance against material mis-statement or loss.
The Board of Directors considers that there is an appropriate ongoing process for identifying, evaluating and managing significant risks faced by BBC Worldwide.
The Board exercises control through an organisational structure with clearly defined levels of responsibility, authority and reporting procedures.
Documented policies and procedures exist to define clearly the level of delegated authority for operational decision making and
to provide structured processes for identifying and managing risk. These policies are applicable across the Group and ensure consistency worldwide.
Key policies include Ethics, Standards and Conflicts of Interest, BBC Worldwide Group Accounting Policies, Anti-fraud & Corruption Code of Conduct,
Investment & Expenditure Approval Guidelines and the Recruitment Policy. Local policies are also in place to help ensure that all trading businesses
comply with local laws and regulations.
Key elements of BBC Worldwide’s internal control environment
Risk Management
The BBC Worldwide Board has responsibility for the identification and management of risks facing the business. An assessment of the exposure to risk, and
the extent to which these risks are controlled, including implementation of actions to mitigate risk, is updated and presented to the BBC Worldwide Audit Committee every
three months. Management assessments are reviewed by the BBC’s Business Assurance’s internal audit function, which reports on
this matter to the BBC’s Executive Audit Committee. This committee considers risk management across the BBC Group as a whole. BBC Worldwide’s Risk Advisory
team monitors risks facing the business and provides advice on developing the internal control environment.
Controls Monitoring
The BBC’s Business Assurance department has a core internal audit function. BBC Business Assurance’s authority and independence are assured by its
joint independent reporting relationship to the BBC’s Executive Audit Committee and to the BBC’s Director-General. The work programme of BBC Business Assurance is unrestricted
and includes BBC Worldwide. The scope of BBC Business Assurance includes the examination and evaluation of the adequacy and effectiveness of the BBC Worldwide systems of internal control and the quality of performance in carrying out assigned responsibilities. The audit plan for BBC Worldwide, which is reported formally
once a year, is based on a continuing assessment of key risks and monitoring compliance of key systems and processes. The results
of testing are reported at each meeting of the Audit Committee, which scrutinises the operation of controls throughout the year.
Operating Units
Key controls over business risks include performance review and exception reporting. The BBC Worldwide Content Investment Committee, a
sub-committee of the Board, must approve all programme and product investment between £0.5m and £2.0m. The Executive Board must approve all
such transactions between £2.0m and £5.0m, with the Board approving all such transactions over higher thresholds.
Treasury Activites
The BBC’s Group Treasury Department manages BBC Worldwide’s activities in line with BBC Group policies. Each BBC Worldwide operating unit
maintains additional financial controls and procedures appropriate to its business environment and carries out local treasury activities, all conforming
to overall standards and guidelines.
Computer Systems
BBC Worldwide has established controls and procedures over the security of data held on computer systems. Arrangements are in place for computer
processing to continue, and data to be retained, in case BBC Worldwide’s own data-processing facility fails.
Financial Reporting
BBC Worldwide has a comprehensive budgeting system, with an annual budget and quarterly forecasts prepared by management and approved by the Board.
Monthly financial information, including balance sheets, cash flow statements, trading results and indebtedness, are reported against the corresponding figures
for the budget and previous year, with action taken by the Directors as appropriate.
Fraud Awareness
Although incidents of fraud are rare, BBC Worldwide takes its responsibilities to minimise the risk of fraud very seriously.
BBC Worldwide operates an Anti-fraud & Corruption Code of Conduct and a Fraud Control Policy which set out consistent standards across the Group and responsibilities
for ensuring adequate controls are in place. In addition, the Risk Advisory team organises training for key areas in order to embed measures to minimise fraud risk
– particularly for those areas operating in high-risk fraud territories.
BBC Worldwide has an ongoing process to review its anti-fraud management practices to ensure that they remain appropriate
to the scale and complexity of the business. BBC Worldwide is responsible for reporting any suspicions of fraudulent activity to
the BBC’s Investigations Unit.
Whistle-Blowing
BBC Worldwide has a whistle-blowing policy to help ensure that any suspicions of malpractice are fully reported. An independent external company administers
the process to ensure anonymity. Each reported incident is notified to the BBC’s Head of Business Assurance who ensures that every incident is investigated and
action taken as appropriate.