Planning & Budgetary ProcessesPlanning & Budgetary Processes

Geoff HeriotGeoff Heriot

Chief of Corporate Planning and Governance

Australian Broadcasting Corporation

Key assumption - the price of ‘independence’

Potential outcomes of public broadcasting –Potential outcomes of public broadcasting –

National cultural identity – connecting communitiesNational cultural identity – connecting communities

Informed & engaged citizensInformed & engaged citizens

Content diversity, quality & innovationContent diversity, quality & innovation

Growth of local creative industriesGrowth of local creative industries

‘ ‘Independence’ is a prerequisite – Independence’ is a prerequisite –

Quality, innovation & local relevanceQuality, innovation & local relevance

An emotional connection with audiencesAn emotional connection with audiences

Brand equityBrand equity

But strong public accountability is the price of But strong public accountability is the price of independence independence

Balancing ‘compliance’ and ‘performance’

EX

TE

RN

AL

IN

TE

RN

AL

COMPLIANCE PERFORMANCE

PAST & PRESENT FUTURE ORIENTED

Strategy Strategy formulationformulation

Provide accountability

Policy Policy makingmaking

Monitoring & Monitoring & supervisingsupervising

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 accountability1: Governance & public accountability

Corporate Plan & Annual Report - the ‘book-ends’ of Corporate Plan & Annual Report - the ‘book-ends’ of accountabilityaccountability

Define expectations up-front – clear Charter, genuine values Define expectations up-front – clear Charter, genuine values (especially editorial) & direction(especially editorial) & direction

Robust targets, performance measures & accountabilitiesRobust targets, performance measures & accountabilities

Strong risk management & probityStrong risk management & probity

2: Strategic tool in building a digital future2: Strategic tool in building a digital future

Maintaining faith with audiences & ourselvesMaintaining faith with audiences & ourselves

Balancing public interest & competitive zealBalancing public interest & competitive zeal

Managing risk, aspirations & organisational capabilityManaging 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:Overall Effectiveness – % people who believe ABC:

Contributes to national identityContributes to national identity

News is balanced & even-handedNews is balanced & even-handed

Innovative, high-qualityInnovative, high-quality

Efficient & well managedEfficient & well managed

Key Result Areas:Key Result Areas:

Audience share, reach, appreciationAudience share, reach, appreciation

Content diversity, quality, etcContent diversity, quality, etc

Governance & efficiencyGovernance & efficiency

Actions & targets to deliver specific service Actions & targets to deliver specific service improvements improvements

Budget & the flow of funds

Stating the obviousStating the obvious

Budgets should Budgets should reflectreflect, not determine, output priorities, not determine, output priorities

Criticality of meaningful, reliable, accessible metricsCriticality of meaningful, reliable, accessible metrics

Performance incentivesPerformance incentives

Effective financial controls & policies (procurement, fraud, Effective financial controls & policies (procurement, fraud, efficiency) efficiency)

Strategic intentStrategic intent

Flow of funds to mirror strategic intent, not status quoFlow of funds to mirror strategic intent, not status quo

Critical relationship between funds flow & functional Critical relationship between funds flow & functional structures – who is to be empowered? To whom will they be structures – who is to be empowered? To whom will they be accountable?accountable?

Funding variables

Six funding models that influence budget Six funding models that influence budget approachesapproaches

Direct Government Appropriation (ABC, CBC) Direct Government Appropriation (ABC, CBC)

Licence Fees (BBC, many European countries)Licence Fees (BBC, many European countries)

Concession Fees (Finland) from commercial licensesConcession Fees (Finland) from commercial licenses

Advertising (NZ, many European countries)Advertising (NZ, many European countries)

Sponsorship (many broadcasters)Sponsorship (many broadcasters)

Subscription (many pay TV providers)Subscription (many pay TV providers)

Membership (US)Membership (US)

Each has advantages & disadvantagesEach has advantages & disadvantages

heriot.geoff@abc.net.au

gheriot@gmail.com