Lax Budget Decision-Making Process Has been Uncovered

Amid a debate over the expansion of NHK’s internet operations, a violation of regulations related to internet streaming has been uncovered.

NHK should investigate the cause and fundamentally review its organizational decision-making processes.

NHK operates its business with subscription fees collected from households with TV sets, and broadcasting is its primary business. Internet streaming is positioned strictly as a voluntary service that supplements broadcasting.

For that reason, programs that can be streamed on the “NHK Plus” online service are determined by regulations approved by the internal affairs and communications minister. Currently, only terrestrial broadcast programs can be streamed, not satellite programs. To stream satellite programs online, NHK would have to apply to the communications minister to change the regulations.

However, NHK included in its fiscal 2023 budget proposal about ¥900 million for necessary equipment costs for the online streaming of satellite programs. After the budget was approved by the Diet, someone at NHK pointed out the problem with the spending plan, and then the broadcaster withdrew it, according to NHK.

It was a clear violation of the regulations. Why did such wrongdoing happen?

The spending plan in question was based on the premise that satellite programs would be streamed online from April 2024. The draft was made in December last year during the tenure of NHK’s previous President Terunobu Maeda.

The matter was not discussed internally. The decision was made only after a written request for approval was circulated to some executives, including the then executive vice president and executive directors. The spending plan was not discussed at a meeting of NHK’s Executive Board, and no explanation was given to the Board of Governors, which is the organization’s highest decision-making body.

There is no way a budget can be formulated unilaterally without applying for approval from the communications minister. The broadcaster’s lax budgeting procedures indicate a disregard for the rules.

The fact that sections concerned within NHK allocated the budget without internal discussions at their own discretion raises the suspicion that there may have been other inappropriate expenditures as well.

NHK intends to establish a study group of lawyers and other experts to compile by the end of July measures to prevent a recurrence and strengthen corporate governance.

Unless NHK clarifies how the problem occurred, fulfills its accountability and makes transparent its proper decision-making processes, the public broadcaster is unlikely to regain trust.

NHK is aiming to expand its online operations, and a communications ministry working group of experts is conducting discussions on the pros and cons of such expansion.

If NHK, which is supported by huge subscription revenues, expands its internet operations without restraint, there is deep-rooted concern among commercial broadcasters and others that the situation could put pressure on the private sector and undermine the diversity of speech.

Now that governance problems at NHK have been brought to light, the expansion of online operations must be carefully considered.

(From The Yomiuri Shimbun, June 2, 2023)