BBC chairman Richard Sharp has resigned after a report found he broke rules by failing to disclose he helped Boris Johnson secure a loan guarantee.
Sharp will stand down at the end of June after an investigation by barrister Adam Heppinstall KC found he breached the code on public appointments.
The probe kicked off after it emerged Sharp helped facilitate an £800,000 loan guarantee for then-prime minister Johnson before he was recommended for the job.
Had Sharp not resigned on Friday morning, prime minister Rishi Sunak would have had to make a final decision on his future.
In his statement, Sharp admitted the report found he did not properly disclose his involvement in the facilitation of the loan guarantee.
However, he stressed his breach was “inadvertent and not material”, and he was resigning to “prioritise the interests of the BBC”.
Sharp said: “Mr Heppinstall’s view is that while I did breach the governance code for public appointments, he states that a breach does not necessarily invalidate an appointment.
“Indeed, I have always maintained the breach was inadvertent and not material, which the facts he lays out substantiate. The secretary of state has consulted with the BBC board who support that view.
“Nevertheless, I have decided that it is right to prioritise the interests of the BBC.
“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, a former Conservative Party donor, was appointed to the role overseeing the public broadcaster’s independence in 2021.
However, the ex-Goldman Sachs banker faced calls to resign after it emerged he helped Johnson arrange a loan shortly before he was recommended for the BBC role.
When the allegations emerged, Sharp said he had “simply connected” the pair and there was no conflict of interest, while Johnson’s spokesman said he did not receive financial advice from Sharp.
However, the Commons digital, culture, media and sport (DCMS) committee said Sharp committed errors of judgment by failing to declare his role in the loan to them before they approved his appointment.
Who Is Richard Sharp?
He is former banker who was for some time a boss to young Rishi Sunak during his Goldman Sachs career.
Sharp was also a major Tory Party donor who was on the board of conservative think tank the Centre for Policy Studies.
Before his stint at Goldman Sachs, in 1985 to 2007, he worked in both commercial and investment banking for JP Morgan.
He read philosophy, politics and economics at Oxford University, is also a former chairman and an emeritus trustee of the Royal Academy.
He acted as an adviser to Sunak during the pandemic, and played a key role in the creation of the government’s £1.57 billion culture recovery fund.
He was also a member of the Bank of England’s Financial Policy Committee from 2013 until 2019.
His appointment as chairman of the BBC was widely regarded as political when the corporation was facing increased scrutiny.
Heppinstall’s report found Sharp “failed to disclose potential perceived conflicts of interest”.
The review said he risked a perception that he was recommended for the role because he helped Johnson “in a private financial matter”.
Hepinstall said there was the risk it would be perceived that he influenced the PM to recommend him by telling him of his application before submitting it.
Prime minister Sunak told reporters at the Scottish Conservative conference: “I haven’t seen the report but I understand he tendered his resignation to the secretary of state and she has accepted it.”
Culture secretary Lucy Frazer said she understood Sharp’s decision to step down, adding: “I thank him for his work and the leadership he has provided as chair of the BBC.”
Labour’s shadow culture secretary Lucy Powell said Sharp’s breach had caused “untold damage” to the BBC’s reputation and “seriously undermined” its independence as a result of Tory “sleaze and cronyism”.
She added: “The prime minister should have sacked him weeks ago. Instead it took this investigation, called by Labour, to make him resign.
“Rishi Sunak should urgently establish a truly independent and robust process to replace Sharp to help restore the esteem of the BBC after his government has tarnished it so much.”
Lib Dem leader Ed Davey said the BBC is being “dragged through the mud” by the Tory party after “yet another sleaze scandal”.
He called for a “rigorous, transparent and independent” process to appoint the next BBC Chair, including a confirmation vote by the DCMS committee.
Tory chair of the committee, Damian Green, said the damage could have been avoided had Sharp been more open with the facts when he appeared before them two years ago.
“The government must now ensure that it recruits a new chair for the BBC who can demonstrate the integrity and impartiality needed for this role,” he added.