The Commons Public Administration and Constitutional Affairs Committee spares no one in its report on the collapse of Kids Company: Camila Batmanghelidjh, the trustees, government ministers, the auditors and regulators. However, the heaviest criticism is for the charity trustees led by the BBC’s Alan Yentob.
Yentob is described as someone who condoned excessive spending and lacked proper attention to his duties. The Corporation is also accused of poor leadership for failing to take action against him when he tried to make suggestions about the BBC’s reporting of Kids Company:
67.Mr Yentob was Chair of Trustees for 12 years. His actions in the weeks surrounding the charity’s collapse have received significant media attention, with allegations that he displayed a conflict of interest in his role at the BBC. Mr Yentob admitted that he stood behind the glass with the producer during a BBC interview with Ms Batmanghelidjh about the charity’s difficulties, and also made a phone call to another BBC journalist who was due to make a broadcast about the charity.127 Mr Yentob said that he was “emotionally upset and engaged” by the coverage, and regrets this action “if it was intimidating”.128 He has since resigned from his position as Creative Director at the BBC. Lord Hall of Birkenhead, BBC director general, said that Mr Yentob’s conduct was “improper” but had not affected BBC coverage of Kids Company.129
68.A charity of Kids Company’s size and complexity requires a Board of Trustees that will demonstrate leadership, judgement and a willingness to challenge assumptions. There was a lack of relevant Trustee expertise in the field of youth services or psychotherapy, although we understand that attempts, albeit belated, were underway to recruit a Trustee with such experience in the run up to the charity’s collapse. The admiration that Kids Company’s Trustees had for Ms Batmanghelidjh’s apparent vision and fundraising capabilities led to a false confidence about other areas of the organisation. The Charity Commission’s guidance to Trustees warns that Trustees should not allow their judgement to be swayed by personal prejudices or dominant personalities, but this is what occurred in Kids Company. This resulted in Trustees suspending their usual critical faculties – particularly over Ms Batmanghelidjh’s insistence on the demand-led business model, her exercise of substantial discretionary spending powers, the effectiveness of internal controls, and the quality of clinical judgements and safeguarding procedures. The length of the Chief Executive and Chair’s tenures were not conducive to challenging the Chief Executive herself. There was a clear link between the failure to correct serious weaknesses in the organisation, and the failure to refresh its leadership.
69.Mr Yentob denied historic failures in financial management and insisted that there were no questions about the financial resilience of Kids Company until 2014. Given the charity’s historic hand-to-mouth existence, its continual failure to build up reserves, significant periods on the brink of insolvency and its inability to meet its obligations to HMRC, this is an inaccurate and alarming interpretation. The evidence Mr Yentob gave to the Committee suggests a lack of proper attention to his duties as Chair of Trustees and a continuing inability to recognise those failures. With his fellow Trustees he was unwilling or unable to impose sufficient control. Together, they failed to exercise their proper function as Trustees.
70.Mr Yentob acknowledges his poor judgement in respect of his position at the BBC during the summer of 2015. His actions were unwise at best, and deliberately intimidating at worst. He has since resigned his main position at the BBC but he still retains substantial responsibilities within the organisation and oversees substantial budgets. It is not within the remit of this Committee to comment on the governance of the BBC, but the proper governance of conflicts of interest and standards of behaviour – particularly amongst its senior executives – is a very serious matter for any reputable organisation. That a senior figure could act in this way and it could take so long for action to be taken reflects poorly on the BBC’s leadership.
Our BBC swing-door correspondent adds:
When Yentob finally “resigned” as Creative Director, Tony Hall and James Purnell no doubt hoped a line had been drawn under the affair. Not so. The Committee rightly question how long it took for action to be taken. In addition, by pointedly abstaining; “it’s not within the remit of the Committee to comment on the governance of the BBC”, Committee Chairman Bernard Jenkin hammers another nail in the coffin in the BBC Trust…