Review says S4C needs 'culture of trust and openness'
There needs to be better cooperation at the top of S4C, according to a report into the Welsh-language channel.
It said too many decisions which should have gone to the authority overseeing S4C were taken by managers.
The report said an "unhealthy distance" between the authority and its staff was closing, but it will take time to create a culture of trust and openness.
S4C's authority, which commissioned the report, said it was taking "positive steps".
The report was commissioned before it was known that S4C was to lose nearly 25% of its budget over the next four years.
Sir Jon Shortridge, formerly Wales' top civil servant, said there was not enough contact between the authority - the body that oversees the channel - and the management board in charge of day-to-day decision-making.
He criticised a system of corporate governance known as "Arwahanrwydd" (Separation). The policy, introduced in 2006, was supposed to provide a clear division between the responsibilities of the authority and the management board.
Sir Jon also criticised the "flow of information" between the authority and the executive. He recommended that board members should regularly attend the authority's meetings.
The "personal chemistry" between the chair and the chief executive was important, Sir Jon also said.
It has been a turbulent year for S4C. Former chief executive Iona Jones left suddenly last July and chairman John Walter Jones retired before Christmas.
Under changes announced by the UK government in October, the channel will be funded by the BBC. It currently receives an annual grant of about £100m from the Department for Culture, Media and Sport.
Sir Jon's review was conducted in September, before it was announced that the channel was to be paid for out of the TV licence fee.
He said more could be done to report to the authority on the quality of programmes and the extent to which they met audiences' needs. Until recently, authority members appear to have been discouraged from formally engaging with the viewing public.
He said the policy of separation "has not served the authority or S4C well".
"Under 'separation' it is clear to me that an unhealthy distance was created between the authority and its staff," he said.
"This is now being closed, but it will take time and much effort to create the culture of trust and openness that is required."
One of the most frequent complaints from authority members was that they did not have the information they needed to let them take decisions properly.
Authority vice chairman Rheon Tomos said reforms already in place and changes proposed for coming months would make sure S4C has a "stable and sustainable system of corporate governance that is fit for purpose today and for the future".
"The system will also enable members of the authority to oversee and account for the present and future performance of S4C in an effective and efficient way," he said.
"The authority has taken positive steps to take ownership of Sir Jon's recommendations."
He said the authority had concluded it had to introduce the changes to create "a stable environment" for S4C, and to provide "greater accountability than ever before".
"We are confident that the implementation of Sir Jon's recommendations will create this stable environment," he added.
The Welsh Independent TV producers' association, TAC, said: "The S4C executive and the authority, must now put their previous troubles behind them and concentrate on working with us to persuade the [UK] government to set in place key guarantees regarding S4C's future."
TAC chair Iestyn Garlick said his members wanted S4C's funding preserved beyond 2015, its editorial and managerial independence from the [UK] government and the BBC protected and to ensure that S4C continued to spend 100% of its content budget solely with independent creative producers.
They also wanted to ensure the BBC was not able to access any funding earmarked for S4C from the licence fee, he said.
Plaid Cymru peer Lord Wigley said any changes made to S4C should have the agreement of Welsh Assembly Government ministers
He tabled an amendment to the Public Bodies Bill, currently passing through the House of Lords
Lord Wigley, a former S4C authority member, said: "If this amendment is passed, it will mean that the bill will require the agreement of assembly ministers before action could be taken relating to S4C."