For the year ended 31 December 2020
Members of the Board of RTÉ are committed to maintaining the highest standards of corporate governance and business conduct. The Broadcasting Act 2009 requires members to have experience of, or capacity in, matters relevant to the oversight of a public-service broadcaster (Section 82). Each member of the Board must also perform his or her functions in such a manner as to ensure that the activities of RTÉ, in pursuance of its statutory objects, are performed efficiently and effectively (Section 87).
RTÉ complies with the Code of Practice for the Governance of State Bodies (“Code of Practice”).
The Code of Practice sets out principles of corporate governance which Boards of State Bodies are required to observe. This includes governance practices and procedures in a broad range of areas such as the role of the Board; codes of conduct and disclosure of interests; business and financial reporting; risk management and internal control; relations with the Oireachtas and parent department; and a range of other specific control procedures. Further information on these areas is set out in the remainder of this section of the Annual Report.
The Chair of the Board is required to confirm annually to the Minister Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media that the governance practices and procedures in RTÉ are in compliance with the Code of Practice.
RTÉ complies with the corporate governance and other obligations imposed by the Ethics in Public Office Act, 1995, the Standards in Public Office Act, 2001 and the Criminal Justice (Corruption Offences) Act, 2018.
The Board has also adopted its own Code of Conduct, which sets out its approach to responsible and ethical business behaviour.
The Board of RTÉ
Members of the Board of RTÉ are appointed under Section 81 of the Broadcasting Act 2009 for a period not exceeding five years. The Act provides for a 12-member Board, to be appointed by the Government as follows:
- Six members are appointed on the nomination of the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media;
- The Oireachtas Committee on Media, Tourism, Arts, Culture, Sport and the Gaeltacht proposes four members to the Minister;
- The Director-General of RTÉ is an ex officio member; and
- One member of RTÉ staff is appointed following election.
The Government appoints one of the members to act as Chair. The Broadcasting Act 2009 also provides for gender balance in the composition of the Board by requiring that its members include no fewer than five men and five women. At 31 December 2020, there are four women and four men on the Board of RTÉ.
Board Diversity by Gender
There were changes to the membership of the Board of RTÉ during the year.
The term of office of four Board members ended on 15 February 2020. The names of these members are listed in the Board attendance record on page 81. Connor Murphy was appointed to the Board with effect from 19 March 2020, filling a vacancy that arose in mid-2019.
At the end of 2020, the Joint Committee on Media, Tourism, Arts, Culture, Sport and the Gaeltacht was in the process of filling the four Board vacancies, via the Public Appointments Service. Applications from suitably qualified members of the public closed on 17 December 2020. The Joint Committee will propose candidates for nomination to the Board of RTÉ by the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media and appointment by the Government.
There were no other changes to the membership of the Board of RTÉ during the year.
Biographical details of the eight members of the Board in office at 31 December 2020, including details of their terms of office, are set out on pages 78 to 80.
Board Diversity by Tenure
The duties of Board members are set out in Section 87 of the Broadcasting Act 2009. In summary, Board members guide the corporate direction and strategy of RTÉ and represent the interests of viewers and listeners, ensuring that RTÉ fulfils its statutory responsibilities in an efficient and effective manner. Each member brings independent judgement to bear by constructively challenging the Executive and by helping to develop RTÉ’s strategic objectives.
Board members have varied backgrounds, skills and experience in a broad range of business areas relevant to the oversight of a public-service broadcaster. The criteria for Board membership are set out in Section 82 of the Broadcasting Act 2009. The criteria include matters such as: media affairs, public-service broadcasting, broadcast content production, digital media technologies, business or commercial affairs, legal or regulatory affairs and matters pertaining to the development of the Irish language.
There is a clear division of responsibilities between the position of Chair of the Board, who is non-executive, and the Director-General.
The Director-General, in conjunction with executive management, takes responsibility for RTÉ’s day-to-day operations. The Chair’s responsibilities include leading the Board, determining its agenda, ensuring its effectiveness and facilitating full participation by each Board member.
The Chair of the Board and executive management meet frequently with the Department of for Tourism, Culture, Arts, Gaeltacht, Sport and Media to discuss RTÉ’s operating and financial performance.
The Board keeps its own structures and performance under ongoing review and awaits the appointment of four new members before reviewing the membership of its permanent committees. The Board’s evaluation of its performance was also postponed pending these appointments.
On appointment, all Board members are provided with briefing documents on RTÉ and its operations. The Board meets in accordance with a regular schedule of meetings and may also meet on other occasions as deemed necessary. All Board members have full and timely access to the information necessary to enable them to discharge their duties. Board papers are sent to each Board member in sufficient time before Board meetings and any further papers or information are readily available to all Board members on request.
The Board papers sent to Board members include the minutes of committee meetings that have been held since the previous Board meeting or, if minutes are not available at the time the papers are circulated, a verbal update is provided at the Board meeting.
Board members have access to advice and the services of the RTÉ Group Secretary, who is responsible for ensuring the Board procedures are followed and that applicable rules and regulations are complied with. RTÉ’s professional advisors are available for consultation with the Board as required. Individual Board members may take independent professional advice and training, if necessary, at the expense of RTÉ. The Board has an insurance policy in place which indemnifies Board members in the event of legal actions taken against them in the course of their duties as Board members.
There is a formal schedule of matters reserved for consideration and decision by the Board. The schedule covers key areas of RTÉ’s business:
- Approval of strategic plans, the annual budget and the annual financial statements;
- Approval of major investments, capital projects and borrowings;
- Significant acquisitions, disposals or retirement of assets;
- Reviewing financial and operational performance;
- Treasury policy and risk-management policies;
- Delegated authority levels, including the approval of major contracts;
- Appointment of the Director-General (in accordance with Section 89 of the Broadcasting Act 2009) and the Group Secretary;
- Appointment of Chair/Directors/Trustees of the RTÉ Subsidiary Companies and Pension Schemes; and
- Reviewing the system of internal control.
Certain other matters are delegated to Board committees, as set out in further detail below.
The Chair of each committee is available to report and answer any questions on the committee’s proceedings at Board meetings, as required.
At 31 December 2020, the Board has established five permanent sub-committees to assist in the execution of its responsibilities. These are the Audit and Risk Committee, the Remuneration and Management Development Committee, the Programme Committee, the newly established Strategic Transformation Committee and the Fair Trading Committee.
The membership of each committee, together with details of attendance at meetings held in 2020, is set out on page 81. The RTÉ Group Secretary acts as Secretary of each Committee.
The Board’s former Strategy sub-committee completed its work in late 2019 having overseen the development of the revised RTÉ Strategy 2020–2024, working closely with the Director-General and the members of the Executive.
Temporary committees may be formed from time to time to deal with specific matters under defined terms of reference. No temporary committees were formed in 2020.
Audit and Risk Committee
The Audit and Risk Committee comprises three Board members, two of whom are considered independent. There is one vacancy on the Committee pending Board appointments in 2021. The committee’s terms of reference, updated in December 2020, are available on the RTÉ website.
The Chief Financial Officer and the Head of Internal Audit attend meetings of the committee, while the external auditors attend as required. The terms of reference of the committee provide that other Board members, executives and others may also be invited to attend all or part of any meeting(s). Both the Head of Internal Audit and the external auditors have full and unrestricted direct access to the committee Chair at all times. In addition, the Audit and Risk Committee has a discussion with the external and internal auditors at least once a year, without executive management present, to ensure there are no outstanding issues of concern.
During 2020, the Audit and Risk Committee reviewed the following matters:
- The group’s annual financial statements, prior to formal submission to the Board. The committee’s review focused, in particular, on the Group’s forecasted cash flows for the foreseeable future, including possible variances in those forecasts, in the context of assessing the Group’s going concern position. The committee’s review also included accounting policies, judgemental areas, the clarity of disclosures and compliance with applicable accounting and legal standards.
- The Independent Productions annual report, prior to formal submission to the Board
Budgeting and financial affairs
- The RTÉ Group’s annual budget, prior to formal submission to the Board
- The expected cash flow impact of Covid-19 on the Group’s financial affairs
- Regular updates on the financial performance of the Group, including pensions and the risk management of movements in foreign exchange rates
- RTÉ’s banking arrangements and facilities, including treasury mandates
- Updates on the project to implement a new Enterprise Resource Planning (ERP) solution
Internal control and risk management
- Quarterly risk reports and movements in the key corporate risks during the year
- Risk briefings from the Executive Sponsors of a selection of the key corporate risks
- The effectiveness of the system of internal control and reporting the results to the Board
- Brexit contingency planning
- The management and update of business continuity plans
Regulation and compliance
- Corporate governance compliance, to include reviewing compliance with the Code of Practice for the Governance of State Bodies
- Regular updates on GDPR and legal matters
- Freedom of Information requests
- Arrangements for raising concerns confidentially (whistleblowing)
- The Internal Audit Plan
- Internal audit reports and progress in implementing actions identified in the reports. The Head of Internal Audit presents a report at each Audit and Risk Committee meeting, summarising work completed since the previous meeting and the findings, together with the areas of focus in the forthcoming period
- The external audit plan, the scope of the audit, as set out in the Engagement Letter, and the effectiveness of the audit process
- Report from the external auditor following its audit of the financial statements and discussion of matters arising
During 2020, the Audit and Risk Committee also received briefings on developments in the areas of corporate governance, risk management and accounting standards and carried out a scheduled review of its terms of reference.
The Audit and Risk Committee has put in place safeguards to ensure that the independence and objectivity of the external audit function are not compromised. These safeguards are reviewed at regular intervals. In addition, the external auditors have confirmed to the Audit and Risk Committee that they continue to operate procedures to safeguard against the possibility that their objectivity and independence could be compromised.
The level of non-audit-related services provided by the external auditors, and the associated fees, is considered annually by the Audit and Risk Committee in the context of the external auditors’ independence, as part of the committee’s review of the adequacy and objectivity of the external audit process. Details of the nature of non-audit services in the current/prior years and the related fees are set out in note 5 to the financial statements.
The Programme Committee comprises three Board members, two of whom are considered independent. The committee considers key developments and plans in respect of RTÉ content and schedules. At each of its meetings, the committee meets with the executives responsible for content/output and their senior management colleagues (including in-house and external independent programme-makers, as necessary) to review programme output and upcoming strategy and plans.
In the area of editorial risk, the Programme Committee and the Audit and Risk Committee align their respective programmes of work to ensure effective oversight and management of editorial risk. Editorial risk is considered by the Board in the context of risk generally, as explained in further detail in the internal control and risk-management section below.
Strategic Transformation Committee
The newly established Strategic Transformation Committee met for the first time in 2020 and comprises three Board members, all of whom are considered independent.
The committee’s role is to measure and monitor RTÉ’s progress and achievement in delivering the plans set out in the 2020–2024 strategy. The strategy is a transformation plan that brings Ireland’s public service media to sustainability and addresses many of the challenges, including financial, that RTÉ faces. The plan includes a major restructuring programme aimed at delivering cost reductions and reforms over three years.
Remuneration and Management Development Committee
The Remuneration and Management Development Committee comprises two Board members, both of whom are considered independent. The committee’s terms of reference are available on the RTÉ website. The committee’s role and responsibilities include:
- Considering the appointment, targets, performance and remuneration of the Director-General and making recommendations to the Board prior to seeking Government approval thereon. Such consideration takes place in the context of relevant Government policy. (The committee’s terms of reference also provide for consideration, as deemed necessary, of the role of the Director-General’s deputy or any person temporarily appointed to the position of Director-General in accordance with Section 89 (8) of the Broadcasting Act 2009);
- Consulting with the Director-General in relation to the remuneration package of executive management, having regard to Government policy in relation to remuneration of senior management of commercial State bodies;
- Consulting with the Director-General in relation to “top talent” contractor contracts; and
- Considering the remuneration of any non-Government appointed members of Boards of RTÉ subsidiary companies.
The committee is assisted, as necessary, by a nominee from the Department of for Tourism, Culture, Arts, Gaeltacht, Sport and Media. The remuneration of Board members is determined by Government policy and, as such, is not a specific consideration of this Committee.
Fair Trading Committee
The Fair Trading Committee is responsible for the oversight of RTÉ’s Fair Trading Policy. The committee comprises two Board members and all members of the committee are considered independent. The committee’s functions are to:
- Review reports from the Fair Trading Officer;
- Oversee and, where necessary, review internal practices and procedures including complaints procedure; and
- Commission periodic reviews of RTÉ fair trading practice.
RTÉ has a Fair Trading Policy and Procedures and a Fair Trading Complaints Procedure, both available on the RTÉ.ie website. During the year the Fair Trading Committee was responsible for oversight of the policy. In compliance with the policy, the committee has approved a report on the Fair Trading Policy and its implementation, which is on page 163.
Independence of Members of the Board
Each Board member brings independent judgement, challenge and rigour to the Board’s deliberations. The Board has completed an evaluation of the independence of its members using the independence criteria as set out in the UK Corporate Governance Code, the Corporate Governance code which is applicable to companies listed on Euronext Dublin.
Board Diversity by Independence
Having regard for the integrity, strength of character and objectivity of Board members, all members are considered independent under those criteria. However, Dee Forbes and Robert Shortt are RTÉ employees and therefore cannot, for that reason alone, be considered as independent members of the Board at 31 December 2020 as per the criteria of the UK Corporate Governance Code.
As disclosed in further detail in note 26 (Related Party Transactions), business transactions took place between RTÉ and certain Board members, or their close family members, in the normal course of business, during the year ended 31 December 2020. Notwithstanding these transactions, the Board has determined that these Board members remain independent in character and judgement. In reaching that conclusion, the Board has considered the following:
In the case of one Board member, RTÉ commissioned programmes from a production company owned/controlled by a close family member of the Board member. In these cases, the Board took account of the existence of formal and transparent Commissioning Procedures and Guidelines, which are published on the RTÉ website and are applied consistently for all commissions. In addition, all decisions on individual commissions are the responsibility of executive management, assessed using clear evaluation criteria, with contracts awarded in line with normal commercial terms and conditions in all cases. Decisions on individual programme commissions are not a matter for consideration and decision by the Board. To demonstrate transparency, an independent review of specific commissioning procedures is also carried out on an annual basis and an Independent Productions annual report is submitted to the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media in accordance with Section 116 (9) of the Broadcasting Act 2009.
The Board also considered the matter of a Board member, or their close family members, being engaged by RTÉ under an artist contract in respect of a programme contribution. The decision to engage a programme contributor or presenter is undertaken by editorial line management having due regard for the requirements of the programme and the skills and experience of the individual being engaged. The Board also noted that contracts are entered into on normal commercial terms and in line with RTÉ’s policy for engaging personnel. There were no applicable engagements in 2020.
Internal Control and Risk Management
The Board has overall responsibility for the Group’s systems of internal control and for reviewing their effectiveness. These systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and provide reasonable but not absolute assurance against material misstatement or loss.
The Board confirms that an ongoing process for identifying, evaluating and managing RTÉ’s significant risks has operated throughout the year and up to the date of approval of the financial statements. This process is in accordance with the Financial Reporting Council’s Guidance on Risk Management, Internal Control and Related Financial and Business Reporting and the Code of Practice for the Governance of State Bodies. The process is overseen by the Audit and Risk Committee.
The Audit and Risk Committee considers risk management to be an integral part of its agenda and is committed to successfully managing RTÉ’s exposure to risk and minimising its impact on the achievement of business objectives.
Risk Management Framework
RTÉ has established a risk-management framework which consists of structures; the assignment of risk responsibilities; procedures and systems for risk identification, assessment and reporting; and monitoring the effectiveness of mitigation actions. The risk-management framework is overseen by the Director of Strategy, reporting to the Director-General.
Throughout the year, RTÉ operated a risk-management process designed to identify the key risks facing the business and to report to the Audit and Risk Committee and the Board on how these risks are being managed. The Board focuses primarily on those risks capable of undermining the RTÉ strategy, or risks which could adversely affect the long-term viability or reputation of RTÉ. As explained in further detail below, the risk-management process comprises two phases – a strategic risk-assessment undertaken by the Executive and a local risk assessment exercise carried out by line management in the divisions.
The members of the RTÉ Executive determine the risks impacting the successful delivery of the RTÉ strategy. Those risks designated as key risks are assigned an Executive Sponsor and Risk Owner and are subject to ongoing review and monitoring during the year. The Risk Owners track the drivers of each risk and document the controls in place to mitigate the risk. In addition, risk indicators are identified to assist in monitoring changes in the likelihood of the occurrence of a risk. This exercise is summarised in a consolidated strategic risks document. This work is overseen and reviewed by a risk function and is linked to the broader strategic planning process. The strategic risks document is presented to the Audit and Risk Committee and to the Board as part of its review of the effectiveness of the system of internal control. During the year, the Audit and Risk Committee also receives quarterly updates on the status of risks, changes in risk indicators and updates on mitigating actions.
Aligned with the strategic risk-assessment process explained above, local risk registers are maintained to consider key risks, evaluate the probability of those risks occurring and assess the likely impact should the risks materialise. The actions taken to manage each risk are recorded.
Principal Risks and Uncertainties
As part of the risk identification process explained above, the principal areas of risk that could materially adversely affect the Group’s business, financial condition or results have been identified. A summary of these risks and the mitigation actions is set out below. This is not intended to be an exhaustive analysis of all the risks that may arise in the ordinary course of business. These key risks are assessed on a continuous basis and management report significant changes in the risks identified, or the materiality of risks, to the Audit and Risk Committee.
Description of Risk
Damage to RTÉ’s reputation arising from a serious failure to comply with editorial standards and obligations to fairness, impartiality and privacy could affect audience trust levels, damage our brand or lead to legal exposure.
Changes in Legislation/Regulation and Compliance
Any changes to regulation or to Irish or EU law which could impact on RTÉ’s operations including inter alia broadcasting legislation, copyright, advertising standards, licence fee, data protection, financial codes of practice and any damage to RTÉ’s reputation arising from non-compliance with the broad range of legal and regulatory requirements.
Risks associated with the strategic allocation and management of financial resources, in order to optimise investment in indigenous content/new improved services and capital (the business); control and reduce operating costs and deliver ongoing value for money across all our services.
This also includes the ongoing management of cash reserves and bank funding to provide adequate financing for ongoing operational cash needs, while also investing in the business.
Inadequate levels of public funding and lack of funding reform, limiting RTÉ’s capacity to deliver its public-service objects as set out in legislation.
Failure to respond to the changing demands from agencies and advertisers and to develop new sources of revenue.
External Stakeholder Support
Action from any of a range of stakeholders (including political, society, industry, cultural, commercial, etc.), which could impact on RTÉ’s ability to deliver on the revised strategic plan.
This is the risk that RTÉ will not effectively manage the radical transformation of the organisation to achieve the revised strategy & business operating model; and a proportionate cost base.
Failure to ensure RTÉ’s content & services are accessible and prominent on relevant platforms, or to invest in the next trends in technology, could threaten RTÉ’s connection with audiences and the achievement of audience targets.
Brand & Reputation
Failure to manage the RTÉ brand could impact on stakeholder perceptions, affecting trust levels and potentially impacting the current and future demand for RTÉ’s services.
A materialisation of any of RTÉ’s key risks could also damage RTÉ’s reputation and undermine support for RTÉ’ strategy.
Failure to identify and develop sufficiently relevant and compelling content, particularly for young and under-served audience groups – the need to take creative risks.
The risk of a deficit in the experience and skills needed across all disciplines, to deliver RTÉ’s revised strategy.
The risk includes the ability to attract, retain and develop staff members, especially for specialist roles; and a lack of diversity.
Covid-19 Business Continuity Planning & Disaster Recovery
The risk posed by Covid-19 or a force majeure event which impacts on business continuity and output, or a failure in critical technology, other infrastructure or security, or the actions of third parties (e.g., disruption of services via cyber/viral attack, supplier action).
In addition to the risk-management process outlined above, a strong internal control framework is in place to provide effective internal control, including:
- A clearly defined organisation structure, with formally defined authority limits and reporting mechanisms to higher levels of management and to the Board;
- A statement of decisions reserved to the Board for consideration and decision;
- Codes of business conduct for Board members and employees, setting out the ethical standards expected in the conduct of business;
- Established procedures to identify, control and report on key risks impacting the business;
- Comprehensive budgeting systems, with annual financial budgets approved by the Board;
- A planning process for each division, with long-term strategic plans approved by the Board;
- Timely financial reporting systems, with actual results reported against budget and considered by the Board on a monthly basis;
- A Good Faith Reporting (Whistleblowing) Policy, which provides staff with a confidential and, if required, anonymous means to report a matter of concern; and
- Comprehensive policies and procedures relating to operational and financial controls, including commitments and capital expenditure. Large capital projects require the approval of the Board.
These controls are reviewed systematically by Internal Audit, on a risk-based approach. The Board confirms that, through the Audit and Risk Committee, it has conducted a review of the effectiveness of the system of internal control up to and including the date of approval of the financial statements.
The process adopted by the Board to undertake the review of the effectiveness of the system of internal controls included:
- Consideration of the authority, resources and coordination of those involved in the identification, assessment and management of significant risks faced by RTÉ;
- Review and consideration of the output of the risk assessment and management process;
- Monitoring of risk reports from management;
- Review of the programme of internal audit and consideration of major findings; and
- Review of the report of the external auditors, who, as part of their normal procedures, test aspects of the systems of internal control and report any significant weaknesses to the Audit and Risk Committee.
The members of the Board considered the Group’s cash flows, liquidity and business activities. They reviewed the Group's forecasted cash flows for the foreseeable future and assessed possible variances in those forecasts. After making those enquiries, the members of the Board are satisfied that RTÉ has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Refer to Note 1 (iv) in the financial statements for further details.
Board Members’ Fees1
RTÉ complies with Government policy on the payment of fees to chairs and directors of State bodies, as determined by the Minister for Public Expenditure and Reform and the Minister Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media.
In November 2019, in the context of cost reduction initiatives identified as part of the revised RTÉ strategy 2020–2024, the members of the Board announced their intention to waive their fees, effective 1 January 2020. As a result, no fees accrued to members in 2020.
Board members at 31 December 2020
Dr P.J. Mathews4
Payments to former Board members3
Margaret E. Ward
1. All members of the Board are non-executive, with the exception of the Director-General, Dee Forbes, serving in an ex officio capacity, and Robert Shortt, appointed following a staff election
2. In addition to Board fees, Robert Shortt was paid as an employee of RTÉ
3. Frank Hannigan resigned as a member of the Board on 18 June 2019, in advance of the scheduled end of his term of office (in November 2019). The term of office of four Board members, listed in the table above, ended on 15 February 2020.
4. In accordance with the “one person one salary” principle, public servants who sit on state boards are not entitled to additional board fees
Expenses of Board members1
In compliance with the Code of Practice for the Governance of State Bodies, the following disclosure is required of the expenses paid to Board members:
Travel – mileage
1. The expenses of Board members above relate to their Board services only and do not include expenses of members in their capacity as RTÉ employees.
Remuneration of Director-General
The remuneration of the Director-General conforms to Government policy for determining the remuneration of chief executive officers of commercial State bodies, issued by the Department of Public Expenditure and Reform, and is approved by the Minister Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media. In compliance with the disclosure requirement in the Code of Practice for the Governance of State Bodies and in Section 305 of the Companies Act 2014, the remuneration of the Director-General comprises:
– Basic salary
– Car allowance
Retirement Benefit Contributions1
1. The amount paid by RTÉ to a defined contribution pension scheme.
Expenses amounting to €1,562 (2019: €4,871) were incurred by Dee Forbes in the conduct of the duties of the post of Director-General.
Prior to the onset of the global pandemic the members of the Executive had agreed to a salary reduction of 10%. No performance-related pay was awarded or paid in respect of 2020 or 2019.