Water regulator Ofwat is proposing changes to its principles for board leadership, transparency and governance.
It is consulting on a new set of principles – until 21st August – which forms part of a programme set out by Ofwat in April to enable and challenge water companies “to rebuild legitimacy and put customers at the heart of their businesses”.
Within the framework, which identifies objectives all companies must achieve, they should have autonomy and flexibility “to deliver the highest standards of accountability and responsibility for their behaviour and outcomes”.
The objectives are:
- The board of the regulated water company sets the purpose, culture and values for the organisation, reflecting its position as a monopoly provider of an essential public service
- The board’s leadership and approach to transparency and governance engenders trust in companies and ensures they can be held accountability for their actions
- The board of the company has the power to set its long-term direction and to make and be accountable for all decisions regarding its regulated activities
- Boards and their committees are competent, well run and sufficiently independent, ensuring they can make decisions that address diverse customer and stakeholder needs
The changes proposed would apply to the 17 largest regulated water companies in England and Wales and the only licensed infrastructure provider, Tideway.
Ofwat Chairman Jonson Cox said: “Water is a vital public service like no other. Holding a licence to provide water is a privilege. It is only right that hose at the top of water companies should be fully accountable for how their business is run and that water companies themselves are held to higher standards than any ordinary business.
“The revised principles we are consulting on will continue to drive the highest standards of board leadership and decision-making across the water sector, which in turn forms part of our ongoing work to make sure that water companies put customers at the heart of everything they do.”