BBC chair in the spotlight over Boris Johnson loan row

Pointed questions from BBC journalists are often directed at politicians. But at an internal meeting this week, the public broadcaster’s own leadership was under the spotlight.

Director-general Tim Davie was flooded with queries from staff about claims that corporation chair Richard Sharp helped arrange a personal loan worth as much as £800,000 for Boris Johnson shortly before the then prime minister recommended him for the post.

“Could the BBC be more impartial with a politically neutral chairperson?” asked one employee. “Will the BBC have a new chairman by February?” asked another.

As well as bringing renewed scrutiny to the BBC’s impartiality in news, the conflict-of-interest allegations against Sharp have raised broader concerns about deteriorating standards in UK public life.

Whitehall’s appointments watchdog, William Shawcross, has launched a review of the process that led to the nomination of Sharp, who denies any wrongdoing.

Sharp’s appointment in 2021 was met with relief at the BBC. While the former Goldman Sachs banker had no background in broadcasting, his business nous — and ties to Downing Street — were seen as useful to the corporation, especially during negotiations with the government over funding. Ministers set the level of the television licence fee, which is charged to anyone in the UK who watches live domestic content and accounts for about three-quarters of the BBC’s budget.

Sharp, who has donated £400,000 to the Conservative party, made no secret of his political leanings, nor his connections to the top of the party — he was prime minister Rishi Sunak’s boss at the investment bank Goldman Sachs. But unlike others on the right, the arts patron broadly supported the licence fee system. He was seen as a relative centrist, not a BBC arch-critic as Johnson had initially threatened to install.

Two years on, the connections that were supposed to be assets have become increasingly problematic.

The man he was being asked to help financially was the man who was ultimately to decide whether he was going to be BBC chairman. His position is unsustainable

In an email to BBC staff this week, Sharp denied that he was involved in arranging any financing for Johnson. He said that Sam Blyth, a Canadian businessman, had approached him with a view to assisting Johnson with what he described as the then prime minister’s “financial pressures”. According to the memo, he then put Blyth in touch with the cabinet secretary, Simon Case, the country’s most senior civil servant.

Sharp, who at the time was an economic adviser to the Treasury, added that when he referred that matter to Case, he reminded him of his outstanding application for the BBC position. “We both agreed that to avoid any conflict that I should have nothing further to do with the matter,” he said.

A government spokesperson said the process that led to Sharp’s appointment was “rigorous”. “All the correct recruitment processes were followed.”

But critics inside and outside the corporation say that, however indirect, Sharp’s association with such a large loan to a serving prime minister while his application to head the BBC’s board was under consideration makes him an unsuitable guardian of the corporation’s independence.

“It’s not rocket science: he should simply have said [to Blyth] ‘I can have nothing to do with this’,” said Steven Barnett, professor of communications at Westminster university. “The man he was being asked to help financially was the man who was ultimately to decide whether he was going to be BBC chairman. His position is unsustainable.”

The issue has caused disquiet among the BBC’s workforce of more than 20,000, including among senior managers in news and other divisions. “There was a lot of respect for him in the organisation, but that has evaporated quite quickly in the last few days,” said one top insider.

A spokesman for Johnson said the allegations against him were “rubbish. Richard Sharp has never given any financial advice to Boris Johnson, nor has Mr Johnson sought any financial advice from him. There has never been any remuneration or compensation to Mr Sharp from Boris Johnson for this or any other service.

“All Mr Johnson’s financial arrangements have been properly declared and registered on the advice of officials.”

Sharp is not the first BBC chair to draw fire for having a close relationship with the government of the day. In the 1980s Labour attacked Margaret Thatcher’s choice of Marmaduke Hussey as “provocative” — the former newspaper executive led Times Newspapers in its battle against the print unions — but he went on to serve two terms.

Later in opposition, leading Conservatives complained that the BBC was being “taken over” by Labour “cronies” when Gavyn Davies, a friend of the then chancellor Gordon Brown, took the chair. Chris Patten, the one-time Hong Kong governor who headed what was then known as the BBC Trust during David Cameron’s coalition government, was a former Tory party chair.

But critics say that any link between Sharp and the prime minister’s personal finances would be more serious than a close political connection. In his review, for which no deadline has been specified, Shawcross is expected to examine whether the BBC chair should have disclosed his connection with Blyth to the four-member advisory panel that advised ministers on the appointment.

Peter Riddell, commissioner for public appointments at the time, said that he “and all the others involved knew nothing about the loan. Those are new facts. But it’s up to William [Shawcross] and his inquiry to judge.”

As well as the Shawcross inquiry, Sharp faces a grilling next month from the House of Commons culture committee, which approved his appointment. The BBC board’s nomination committee is, at Sharp’s behest, conducting its own review led by independent director Nicholas Serota, although it does not have the power to remove the chair, which rests with ministers.

In line with the governance code of public appointments, candidates for the role were required to declare any interests that “could lead to a real or perceived conflict of interest”. That requirement sounds broad, but how such conflicts are defined is nevertheless open to interpretation.

“I veer on the side of transparency rather than necessarily the letter of the code,” Riddell said. “It would have been much more sensible” for Sharp to have made the disclosure. “That would then be taken into account. Whether it would have made any difference [to the appointment] I have no idea.”

Sharp insists that he was appointed on merit and that there was no conflict of interest. In the memo to staff he wrote: “Even now, I don’t know any more than is reported in the media about a loan or reported guarantee.”

“It’s always been clear that he has close links to the Conservative party,” said Ed Vaizey, former Conservative culture minister. “Frankly I don’t think it [the Johnson row] threatens Richard Sharp’s position. I think he’ll be judged on how well he stewards and defends the BBC — not on what I regard as a very minor issue.”

Such stewardship is needed as the BBC faces challenges to retain viewers in the age of streaming services. Despite hopes that Sharp would secure a favourable funding settlement with the government, the corporation was blindsided a year ago by one of its least generous funding packages in decades, with the licence fee frozen for two years at £159.

The corporation is also in discussions with the government over funding of the World Service, which is financed separately. Sharp warned this month that the future of the international broadcaster could be in “jeopardy”.

Sharp, who donates the £160,000 he earns from the chairmanship to charity, has recognised the controversy over Johnson has been a “distraction”, but with two years of his four year term left to serve, he has no plans to stand aside.

The broad expectation among BBC insiders is that unless damaging new details about the affair come to light Sharp will probably survive.

But they warn the episode undermines Sharp’s credibility as a champion of impartiality, which has been one of his top priorities at the corporation, even if it did not stop him again stressing its importance at an “away day” for BBC managers in Greenwich this week.

In that context, the technicalities of whether the appointment process broke any rules may be beside the point.

The former BBC presenter Andrew Marr, who now has a show on rival LBC, this week said the row came at a time of “immense public scepticism” about the broadcaster.

He called for Sharp to stand down, describing his connections with Johnson as “toxic”. “It looks cosy in a way the country hates.”