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BBC Chair Broke Rules In Boris Johnson Loan Row – Here's What You Need To Know

Richard Sharp resigns as BBC Chair after breaking the Governance Code (Alamy)

5 min read

Richard Sharp has resigned from his role of BBC Chair after an independent report concluded he was found to have broken the Governance Code over his relationship to former prime minister Boris Johnson's finances.

Sharp stood down from the government appointed senior BBC position on Friday after he was found to have breached the governance code in his role facilitating an £800,000 loan for Johnson during his time in Downing Street.  

The former Goldman Sachs banker was in talks relating to the funding of Johnson's lifestyle while he was in office in November and December 2020. At this point Sharp had sent his application to the Corporation and was in the late stages of the hiring process, the Sunday Times reported.

Johnson has allegedly struggled with his financial situation for years. In 2016 he reportedly told a friend he needed £1 million pounds per year to get by, according to The Times. 

Following a hearing with Sharp in February, a report from the Culture, Media and Sport committee found the BBC Chair had made "significant errors of judgement" after failing to declare the loan guarantee.

An inquiry, led by Adam Heppinstall KC, which aimed to establish details of Sharp's involvement with Johnson's finances and whether this presented a conflict of interest in his appointment at the BBC, has now concluded.

Here's what you needed to know: 

What did the report conclude?

Heppinstall found that Sharp and Johnson met in November 2020, where he told the former prime minister he was interested in the position of BBC Chair. 

The report stated that there was a "risk" it could have been perceived that Sharp wanted Johnson's recommendation for the role after making the prime minister aware that he intended to apply. 

The interview panel may have been aware of Johnson's support for Sharp, but it was made clear they did not know of any "pre-application conversation" between the pair.

Before he was interviewed, Sharp told the former prime minister he would meet the Cabinet Secretary Simon Case to introduce him to a person who might help Johnson with his finances. Sharp admitted he should have told the interview panel he was aware of this arrangement. 

The inquiry also found there was a risk Sharp was recommended for the role of BBC Chair because he helped the former prime minister with a "private financial matter".

Sharp failed to mention his conversation with Johnson about the loan, which amounted to a "potential conflict of interest".

Sharp breached the Governance Code by not declaring his discussions relating to Johnson’s finances. However, the report said their conversation would not have stopped him from being appointed if he had told the interview panel beforehand.

The report also said the breach did not make Sharp’s appointment invalid. But it said the Secretary of State for Culture, Lucy Frazer, should consider the non-disclosures and findings from the report. 

Why Sharp's relationship with Boris Johnson's finances ahead of his BBC appointment matters

The BBC has a fundamental commitment to produce non-partisan and impartial coverage. 

The Governance Code, which Sharp broke, applies to those who apply for public positions. The principles include selflessness, integrity, openness and transparency, diversity, assurance and fairness.

The last tenet means the selection process should be "fair" and "impartial" with every candidate judged against the same criteria. 

Rishi Sunak vowed to break away from the sleaze of previous governments after promising to lead a Government that would "have integrity, professionalism and accountability at every level".

The Prime Minister has already sacked Nadhim Zahawi over a serious breach of the ministerial code, and last week Dominic Raab resigned as Justice Secretary and Deputy Prime Minister after an independent report into bullying allegations concluded he had behaved in an intimidating manner. Sharp's resignation will be an unwanted reminder for Downing Street of Westminster sleaze allegations.

Sunak is now tasked with appointing a new BBC Chair, which will likely face even closer scrutiny than usual. 

Chair of the CMS Committee, Conservative MP Damian Green said Sharp's failure to disclose what he knew about Johnson's finances will have affected trust in the BBC. 

"Mr Sharp’s resignation shows that pre-appointment hearings should not be seen by candidates as a minor inconvenient hurdle to be brushed aside, but as an important part of a process to ensure the right person is appointed to the job," Green said in a statement responding to the BBC chair's resignation. 

"We hope that lessons have been learnt by all those involved so that future appointments are not clouded in the same way and people can have faith in those chosen for public positions."

Frazer thanked Sharp for his leadership as chair of the BBC but said his decision to step down was "in the wider interests of the wider Corporation".

Labour also noted the potential damage to the BBC's reputation that had been inflicted by the government's handling of the matter. 

“The report is clear: Mr Sharp breached the rules expected of candidates by failing to disclose his involvement in a personal loan to the then PM," shadow culture secretary Lucy Powell said.

“As a result, this breach has caused untold damage to the reputation of the BBC and seriously undermined its independence as a result of the Conservatives’ sleaze and cronyism."

Sharp has defended his case

Despite conceding that his future at the BBC was untenable, Sharp defended his actions and involvement in helping Johnson secure an £800,000 loan.

In his resignation speech, he maintained the breach of the Government Code was "inadvertent and not material," and that Frazer "supported that view". 

But he felt the fallout from the incident was "a distraction from the corporation's good work" and chose to step down. He will remain in post until a new successor is appointed. 

What happens next?

The Government will have to appoint a new Chair of the BBC. The selection panel will likely consist of a DCMS permanent secretary and three independent members. 

In October 2020, the panel had 23 candidates submit their applications, of which eight were shortlisted.

Sunak has so far resisted pressure to commit to the appointment being non-political in response to the fallout from Sharp's tenure. 

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