Ofwat has launched a consultation asking for the views of its stakeholders on three new rules of remuneration and governance proposed in the Water (Special Measures) Bill.
The consultation will help the regulator in designing the rules outlined in the Bill:
- To prohibit performance related pay for water company directors in certain circumstances;
- To require water companies to appoint and have in place people in senior roles only if they meet specified standards on fitness and propriety; and
- To require companies to have arrangements to involve consumers in decisions that are likely to have a material impact on consumer matters.
Ofwat is aiming to develop rules that prompt a shift in water company culture, deliver enhanced accountability and transparency, and ensure water companies’ priorities better reflect the expectations of customers.
Ofwat’s Senior Director for Sector Performance, Helen Campbell, said:
“The Bill proposes strengthening Ofwat’s powers on remuneration and governance. It is an important opportunity to help us drive transformative change in the culture and behaviour of leadership in water companies over the long term, helping to rebuild public trust.
“We want to understand how we can design and implement the rules to ensure they deliver the best outcomes for customers and the environment. We’re keen to hear feedback from all our stakeholders on our initial ideas and how we can improve them and encourage interested individuals and organisations to share their views during the consultation period.”
“Overall, without this change in culture, alongside a step change in performance, water companies will not fulfil the potential offered by the next price control to deliver cleaner rivers and seas and improvements for customers.
Ofwat is asking for responses to the consultation by 19 November 2024.
