Planning & Budgetary Processes Geoff Heriot Chief of Corporate Planning and Governance Australian Broadcasting Corporation

Key assumption - the price of ‘independence’  Potential outcomes of public broadcasting –  National cultural identity – connecting communities  Informed & engaged citizens  Content diversity, quality & innovation  Growth of local creative industries  ‘Independence’ is a prerequisite –  Quality, innovation & local relevance  An emotional connection with audiences  Brand equity  But strong public accountability is the price of independence

Balancing ‘compliance’ and ‘performance’ EXTERNAL INTERNAL COMPLIANCEPERFORMANCE PAST & PRESENTFUTURE ORIENTED Strategy formulation Provide accountability Policy making Monitoring & supervising Source: Robert I. Tricker, International Corporate Governance: Text Readings and Cases, New York: Prentice Hall, 1994, p.149. Corporate planning Platform/network positioning Work unit planning Corporate Policies Risk management – business, people & financial Management systems Meeting targets Monitoring compliance Internal reviews Annual Reporting Parliamentary Committees Audience appreciation External reviews

Planning in a public broadcaster 1: Governance & public accountability  Corporate Plan & Annual Report - the ‘book-ends’ of accountability  Define expectations up-front – clear Charter, genuine values (especially editorial) & direction  Robust targets, performance measures & accountabilities  Strong risk management & probity 2: Strategic tool in building a digital future  Maintaining faith with audiences & ourselves  Balancing public interest & competitive zeal  Managing risk, aspirations & organisational capability

Key drivers of performance (Australia) Relevance & Appeal Audience share, reach & appreciation Digital innovation Access to distribution platforms PBS Distinctiveness Australian identity Content genre Localism Quality Creative risk-taking Organisational Capability Transparency Risk management Editorial compliance Skilled workforce Value for Money Efficiency & effectiveness Funding

Measuring performance (ABC) Overall Effectiveness – % people who believe ABC:  Contributes to national identity  News is balanced & even-handed  Innovative, high-quality  Efficient & well managed Key Result Areas:  Audience share, reach, appreciation  Content diversity, quality, etc  Governance & efficiency Actions & targets to deliver specific service improvements

Budget & the flow of funds Stating the obvious  Budgets should reflect, not determine, output priorities  Criticality of meaningful, reliable, accessible metrics  Performance incentives  Effective financial controls & policies (procurement, fraud, efficiency) Strategic intent  Flow of funds to mirror strategic intent, not status quo  Critical relationship between funds flow & functional structures – who is to be empowered? To whom will they be accountable?

Funding variables Six funding models that influence budget approaches  Direct Government Appropriation (ABC, CBC)  Licence Fees (BBC, many European countries)  Concession Fees (Finland) from commercial licenses  Advertising (NZ, many European countries)  Sponsorship (many broadcasters)  Subscription (many pay TV providers)  Membership (US) Each has advantages & disadvantages