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

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

2. 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

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

4. 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

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

6. 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

7. 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?

8. 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

9. heriot.geoff@abc.net.au gheriot@gmail.com