BBC chairman Richard Sharp has resigned after it was found he had breached the code on public appointments as a result of his involvement in helping secure an £800,000 loan to Boris Johnson.
Sharp said it was vital that he "prioritise the interests of the BBC," as he gave a public statement confirming his resignation in the wake of a report by Adam Heppinstall KC, which concluded that his relationship with Johnson's financial affairs had not been properly disclosed at the time of his appointment.
The inquiry began after it was reported that Sharp had been involved in conversations about helping Johnson secure an £800,000 loan only weeks before he became BBC chairman. A Cabinet Office memo leaked in January showed that Johnson was warned by Simon Case, the cabinet secretary, to stop speaking to Sharp about finance. In February, Sharp admitted he met Johnson about his intention to apply for the role of BBC chairman but stressed the two did not discuss finances.
Today's report said Sharp failed to disclose potential perceived conflicts of interest when he was interviewed for the job. It added he told former prime minister Johnson that he wanted to apply for the role before he made his application in November 2020.
Heppinstall concluded this presented a "potential perceived conflict of interest" after there was a "risk" Sharp was appointed to the role after he helped the then-prime minister in a private financial matter.
Failing to mention a conversation between himself and Johnson about the loan was also seen as a potential conflict of interest. Although the report found Sharp breached the governance code, it did not say it was necessarily a resigning matter, but Sharp said staying in post until the end of his term could pose a distraction to the BBC's "good work".
"I feel that this matter may well be a distraction from the corporation's good work were I to remain in post until the end of my term. I have therefore this morning resigned as BBC chair to the secretary of state, and to the board," Sharp said in his resignation statement.
"It was proposed to me that I stay on as chair until the end of June while the process to appoint my successor is undertaken and I will of course do that in the interests of the corporation's stability and continuity."
Sharp, who previously worked as a banker for Goldman Sachs, was recently challenged by a parliamentary committee over a potential conflict of interest when he introduced his friend Sam Blyth to Case to discuss whether Blyth could be a guarantor for a loan for the prime minister.
Sharp said today that he had "always maintained the breach was inadvertent and not material, which the facts he lays out substantiate".
Johnson was questioned while he was walking into his car in London this morning but gave no comment on the ongoing situation.
The BBC chairman is appointed by recommendation of the prime minister's advice.
Culture secretary Lucy Frazer thanked Sharp in a statement for his leadership but said his decision to step down was "in the wider interests of the wider corporation".
Lucy Powell, Labour’s shadow culture secretary, said: “The report is clear: Mr Sharp breached the rules expected of candidates by failing to disclose his involvement in a personal loan to the then PM.
“As a result, this breach has caused untold damage to the reputation of the BBC and seriously undermined its independence as a result of the Conservatives’ sleaze and cronyism.
Powell called for Sunak to establish a "truly independent and robust process" to determine Sharp's replacement.
Tom Scotson is a reporter for CSW's sister title PoliticsHome, where this story first appeared