London, 24 January 2023 – A claim in the Sunday Times yesterday that “the BBC Chairman helped to arrange a guarantee on a loan of up to £800,000 for Boris Johnson weeks before the then prime minister recommended him for the role” has attracted considerable press coverage and led to a demand from the Labour party for an investigation by the parliamentary commissioner for standards.
Leaving aside any question of whether or not the claims made in the Sunday Times are true – this will, it seems, be the subject of a formal review – the question arises once again of the strange blindness of some of those in public office to the recognition and disclosure of actual or potential conflicts of interest.
S.175 of the Companies Act 2006 is very clear on the point, creating a specific duty to avoid conflicts of interest –
“(1) A director of a company must avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company.
(2) This applies in particular to the exploitation of any property, information or opportunity (and it is immaterial whether the company could take advantage of the property, information or opportunity).
(3) This duty does not apply to a conflict of interest arising in relation to a transaction or arrangement with the company.
(4) This duty is not infringed—
(a) if the situation cannot reasonably be regarded as likely to give rise to a conflict of interest; or
(b) if the matter has been authorised by the directors.”
The Companies Act goes on to detail the process by which directors may authorise a conflict of interest, but that is not the issue here.
Managing conflicts of interest is also a key element of the Seven Principles of Public Life (also known as the Nolan Principles) “which apply to anyone who works as a public office-holder ... The principles also apply to all those in other sectors delivering public services”. Principle 2, Integrity, states that “Holders of public office must avoid placing themselves under any obligation to people or organisations that might try inappropriately to influence them in their work. They should not act or take decisions in order to gain financial or other material benefits for themselves, their family, or their friends. They must declare and resolve any interests and relationships.”
Peter Swabey, Policy and Research Director at CGI, said:
“There is, of course, an element of politics at work here, with opposition parties seeking advantage from drawing attention to a press claim of inappropriate behaviour by the former Prime Minister, Boris Johnson. But conflicts of interest are important. This is a basic tenet of business life and is clearly stated in the Companies Act.
There are two issues at stake here – whether the selection process which resulted in Richard Sharp’s appointment as Chair of the BBC was flawed as a result of his alleged introduction, as a mutual friend, of Mr Johnson to Sam Blyth, who had offered to act as guarantor of a credit facility, and was it flawed as a result of any subsequent involvement by Mr Johnson in the appointment process.These are issues that we can understand in the context of the nomination committee process and much will depend on the facts in this case – what was disclosed, by and to whom, and when; and what involvement Mr Johnson actually had in the process given that the recommendations for position of Chair come from the Secretary of State for the DCMS.
All that said, it seems to me that the appointment of the Chair of the BBC – the public service broadcaster - requires deeper thought that most. It should be above suspicion and here there remain questions to be answered by the investigation to be run by the commissioner for public appointments, William Shawcross.
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Notes to Editors:
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