Thursday, May 17, 2007

The governance of public broadcasters

Most of the time, I look at public service broadcasters (PSBs) as exquisitely political creatures.

Most of the time, I think that's the right perspective.

Recently, however, I've been looking at PSBs as corporations, with all the associated paraphernalia of corporate governance. The results have been interesting.

PSBs can be divided into two types: dual board, or single-board.

German PSBs have dual boards: a massive, supervisory board (aufsichtsrat), composed of upwards of twenty members representing civil society, and a much smaller executive board, led by a generalintendant. Something like France Télévisions, by contrast, has a single board of five members, with a President/CEO.

Until now, I've viewed the institutional choice between single- or dual-board structures as a political one: where politicians choose a dual-board structure, they do so because they believe this structure provides a buffer against political pressure, and because they want to insulate the PSB from such pressure.

What if these choices aren't made with conscious objectives in mind? What if, instead, politicians just follow examples drawn from other fields?

In corporate governance generally, we can draw a line between three groups (Hopt, Klaus J., "The German Two-Tier Board", in Hopt, et al, Comparative Corporate Governance (Oxford, OUP):
  • single board countries: UK, USA, Ireland, former British colonies, Spain, Italy, Portugal and Greece
  • dual-board countries: Germany, Switzerland, Austria, the Netherlands, Scandinavia;
  • mixed countries: Eastern Europe, France, Belgium
If the corporate governance of PSBs reflects national practice rather than political views about the desirability of independence, then we should expect single-board countries to have single-board PSBs, dual-board countries to have dual-board PSBs, and mixed countries to plump for either. What's the evidence like? Of the twenty-nine PSBs for which I have access to the legislation, here's the breakdown:
  • single board PSBs (11): USA, Australia, Canada, New Zealand, South Africa, Chile, Spain [post-reform], Portugal, Greece(?), France, Bulgaria
  • dual-board PSBs (18): Austria, Croatia, Denmark, Estonia, Finland, Hungary, Israel, Japan, Latvia, Lithuania, Norway, Poland, Romania, Slovakia, Slovenia, Spain [pre-reform], Italy, UK, Ireland,

The fit is not bad. Three dual-board countries don't fit: Italy, UK and Ireland; no single-board countries don't fit. There are some countries whose systems of corporate governance I don't know enough about to decide whether their placement is accurate (Israel, Japan, Chile).

Some tentative conclusions:
  • PSB governance may be strongly influenced by more general corporate practice;
  • those countries which could have opted for either system chose dual boards;
  • the choice of governance for the BBC and RTÉ was contrary to corporate practice;
  • It nevertheless seems to have been a good choice, with both broadcasters enjoying a better reputation than TVNZ, ABC, or (especially) the CPB in the USA, at least in this author's judgement;
Therefore, the dual-board model may be preferable for public broadcasters, squaring the circle of accountability and independence.

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