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The last two jobs held by George Entwistle before he became director-general and editor-in-chief of the BBC last month were as its director of vision and controller of knowledge commissioning. Only an organisation where George Orwell once worked could devise such marvellously sinister titles.

The world’s most powerful state broadcaster is one of those places where something that makes perfect sense internally is incomprehensible to an outsider. It conforms to its own logic and follows its own rules. The results are often impressive – think Sherlock, its recent Olympic Games coverage and foreign news – but occasionally baffling.

This is one such occasion. Anyone with a heart, watching the horrifying testimony of one victim of Jimmy Savile, the paedophile who abused his power as a star BBC presenter in the 1970s to round up vulnerable young people in his studio audience, would have felt compelled to take action. The BBC filmed the interview then proceeded to shelve the evidence of its failure.

That was done by a well-meaning corporation, run by cultured people, with strict editorial standards and multiple layers of controls. Yet every one of the safeguards failed, leaving Mr Entwistle to tell puzzled members of the UK parliament on Tuesday that he had not asked a fellow BBC executive about it because he did not want to breach protocol.

The impression he gave was of a vibrant place with a curious absence of management or collective purpose. It was as if General Electric were run by individual plant managers or Carrefour by store managers, and head office executives did not think it was their role to lead.

The notion is perilous, both to the chances of Mark Thompson, Mr Entwistle’s predecessor as director-general, taking up his new role as chief executive of the New York Times as planned next month, and for the BBC’s future.

It is a highly respected and well-funded broadcaster, with revenues of £3.6bn from the licence fee that each UK television viewer is compelled to pay. Its legitimacy rests on the trust of the British people. Now it looks as if its right hand does not know what its left is doing, and its brain has become disengaged.

If so, the purpose of channelling taxpayer funding for broadcasting through a monolithic organisation is questionable. Why not break it into the pieces it now appears, beneath the corporate brand, already to be? If the BBC is a self-directing collection of producers and editors, why keep them under one roof?

Such questions are reinforced by the BBC’s grey corporate culture. There is plenty of life at its roots, from acerbic presenters such as Jeremy Paxman to brilliant writing and acting. But it rivals the Chinese Communist party in the uniformity of its senior executive layer and, like the CCP, is getting greyer.

The BBC’s journey from Lord Reith, its visionary founder, to Greg Dyke, the wisecracking DG between 2000 and 2004, through technocratic Mr Thompson to mild-mannered Mr Entwistle reminds me of the one from Mao Zedong to Deng Xiaoping, via Hu Jintao to Xi Jinping.

This is no coincidence. Like the CCP, the BBC’s elite is constantly engaged on licence fee renewal (the five-year plan) and jostling over leadership succession. It is staffed by intelligent technocrats educated at first-rank universities (Tsinghua and Peking) whose job is to preserve the status quo but who have a tenuous grip on events. In such an inward-looking bureaucracy, full of managers called “controllers”, conformity is a virtue.

Some BBC executives dismiss as convenient nonsense Mr Entwistle’s claim that he did not quiz Helen Boaden, head of BBC News, further when she mentioned the Savile investigation because of the firewall between news and entertainment. The two were then rivals to become director-general and they think he did not want to provoke her.

Still, insiders acknowledge the accuracy of his explanation that the BBC director-general is not editor-in-chief in the sense that most people would know it. All of the day-to-day decisions are taken by programme editors and the BBC’s daily news meeting mainly reviews the previous day’s outcome rather than setting a common new agenda. If there are not obvious problems to solve, the bosses keep their distance.

Mr Entwistle himself complained about this Balkanised set-up in his first speech to the BBC’s 23,000 staff. He criticised “the silos, internal competition, the duplication, the jockeying for position. And at its worst, the leaking, the briefing against other people and other departments – and the sheer waste of energy and money.”

The Savile case, in which the editor of the Newsnight programme apparently dropped the investigation without even watching the damning interview, is a haunting example of what can result. There must be many other cases of less important but valuable material (paid for by the licence fee) having been thrown away, unknown to executives.

Such corporate devolution does have virtues. The BBC is a big place, employing 2,000 journalists and still commanding 71 per cent of weekly news viewing in the UK, according to Enders Analysis. It attempts to cultivate diversity and creativity by allowing staff to make programmes in groups, as does Google by allowing software engineers to pursue their own ideas in 20 per cent of their working time.

But that does not mean losing all coherence and sense of direction. If the members of the BBC’s executive board will not talk to each other and do not know what is happening until they find out in a crisis, they are not managing the institution effectively. The BBC could do better, if it only had a heart.

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