Michael Grade, the commercially astute BBC chairman, has been thrust into yet another potential conflict of interest issue with his apparent £300 million pursuit of Andrew Lloyd Webber's Really Useful Group.

Yet it is as much up to the BBC to extricate Mr Grade from any perceived conflict as it is for the chairman to act himself.

The BBC and its bosses, in various guises, has an unfortunate habit of repeating itself - almost as often as some of its best programmes. Not for the first time has Mr Grade found himself at the centre of debate about the BBC and good business practice.

First, there is Mr Grade's involvement as chairman of Pinewood Studios, the owners of film and television studios. Mr Grade has done reasonably well out of this, cashing in about £250,000 of his 4 per cent stake in Pinewood in April last year, at the time of its £91 million flotation. Then, Mr Grade's total stake was worth more than £3..6 million based on the 180p a share issue price.

Unfortunately, in the 13 months since, Pinewood shares have lost 30p, or 16 per cent, and - on paper - Mr Grade is just over £456,000 worse off.

But Pinewood has also done rather well out of the BBC. According to the Corporation's most recent annual report, the BBC paid the studio group £640,577 in the 12 months to the end of March last year for the use of its facilities.

The potential conflict of issue arises, of course, as a result of Mr Grade's chairmanship of both groups.

The busy Mr Grade, who is paid £80,000 a year to work a four-day week at the BBC, is also a director of Hemscott, the financial information provider.

And now, Mr Grade appears to have expressed an interest in being involved with a £290 million bid to own some of the Really Useful Group's lucrative rights, including to musicals such as Cats and Phantom of the Opera. If he is successful in his reported efforts to become non-executive chairman of the taken-over group, he will presumably be presiding over another company that will want to win commercial business from the BBC.

The BBC refused to comment this morning on Mr Grade's reported interest in the Really Useful Group. Its corporate governance unit declined to eleborate on how the BBC might deal with any potential conflict if Mr Grade does find himself at the head of the company.

But the BBC does have a "well-established" system in place to manage either real or perceived conflicts of interest. A lower levels, its Producers' Guidelines have explicitly forbidden programme makers from holding commercial interests in their broadcasts - although there have been several well-publicised breaks with this ideal.

Elsewhere, there is a register of interests, available online, and a process whereby directors declare at meetings their involvement in any project where a commercial decision by the BBC might raise eyebrows, and hackles, elsewhere. These declarations are minuted and subsequently published.

But should the BBC be nervous about exploring this? Mr Grade clearly has the right to pursue any business venture he might choose, provided his contract allows and as long as any potential conflicts are addressed and then managed appropriately. And also as long as he can find the time to carry out all of his various responsibilities effectively.

The corporation itself is becoming increasingly commercially minded. It is pursuing a radical cost-cutting exercise - including some deeply unpopular job cuts - designed exactly to create an organisation that can compete more effectively in an extremely competitive media age. Only today, the BBC disclosed that its Worldwide commercial arm saw profits rise by 50 per cent to £55 million last year following the completion of a thorough reveiw of all of its activities that was carried out last year.

Mr Grade's business savvy - both at the corporation and demonstrated by its chairman - is to be welcomed. Perhaps he is just the candidate the corporation needs to spearhead its transformation into a streamlined, profit-generating business.

But it is not just for Mr Grade to declare his hand at any potentially sticky board meetings. The BBC too has a role to play.

If it finds that it is unhappy with his plethora of interests, the corporation could always put Mr Grade's salary up for review. Compared with the revenue numbers flying around at both Pinewood and the Really Useful Group, his £80,000 annual BBC salary might if anything be considered small.

Mr Grade might be convinced to limit his business ventures - but like all who are shrewd in business, only for the right fee.

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