Thursday, November 15th, 2012

It has been reported that the BBC have paid ‘headhunters’ Egon Zehnder, fees of almost £400,000 plus VAT to fill 3 senior BBC vacancies since 2010. These positions were the digital media director, head of vision and the Director General. The process twice produced internal candidates, one of which was George Entwistle. Egon Zehnder, it appears, recruited Lord Patten to his position on the BBC Trust. The Egon Zehnder website highlights:

“The ability to make good ‘people’ decisions is today’s most enduring source of competitive advantage. Decisions at the time of recruiting senior talent cast the longest shadow of all.”    QUITE!!

Allegedly, the fees for the DG post were £157,000 plus VAT. If this recruitment process were to be interrogated, it warrants the following questions:

  1. Who awarded the contract to Egon Zehnder? The extent and involvement of HR should be probed, as should their engagement, or lack of it, with procurement.
  2. What role did the Department of Culture, Media & Sport play, if any? It may be borne in mind that DCMS appointed Egon Zehnder to recruit the Chairperson of the BBC Trust, Lord Patten. He is incidentally, a non-executive director of Russell Reynolds Associates, Headhunters.
  3. Who wrote and signed off the person specification, setting out the specific personal qualities and depth of experience required?
  4. Who determined the recruitment process? If it was the headhunters, why didn’t the BBC HR Department do it?
  5. Were advance payments made to Egon Zehnder (remembering the ship for St Helena case)?
  6. Assuming the figure of £157,000 is accurate, who has asked for a breakdown? Do we have
  •     per diem fees for the consultants?
  •     what overheads were allowed?
  •     what expenses were paid, including interviewees travel & hotels?
  •     what profit did Egon Zehnder make from the deal?

7. What specific Contract Terms & Conditions were agreed with Egon Zehnder?

The answers to the above would be informative. There is, of course, a lessons learned for any organisation engaging headhunters. They usually insist on an up-front payment on retention and typically this is non-refundable. Their operations are cloaked in secrecy, as they use varied tactics to identify candidates, having accessed their ‘knowledge garden’. Would we be expecting too much to assert that a competent HR Director should be capable of finding senior staff for an organisation? We also observe, through our experience, that procurement are excluded from the process to appoint headhunters. Would a reason be that they would ask too many awkward questions.

Finally, returning to the BBC fees of allegedly £157,000, at £1000 per diem it equates to 157 person days – who has the audited time expended, data sheets, to clearly demonstrate that under English Common Law, Unjust Enrichment has not occurred? We are not alleging it did, simply asking who can demonstrate it didn’t.