Ofwat moves to mandate its board leadership objectives
Ofwat’s campaign to strengthen water companies’ corporate governance continued last week with a move to make the adoption of its new board leadership objectives compulsory.
The regulator is consulting until 14 June on incorporating the board leadership, transparency and governance objectives, which were upgraded earlier this year, into company licences and making it mandatory for companies to meet them.
The objectives are that:
the board of the appointee establishes the company’s purpose, strategy and values, and is satisfied that these and its culture reflect the needs of all those it serves;
the appointee has an effective board with full responsibility for all aspects of the appointee’s business for the long term;
the board of the appointee’s leadership and approach to transparency and governance engenders trust in the appointee and ensures accountability for their actions; and
the board of the appointee and its committees are competent, well run, and have sufficient independent membership, ensuring they can make high quality decisions that address diverse customer and stakeholder needs.
Ofwat said making the objectives compulsory “will make sure there is clarity and commitment about purpose and values embedded at the very top of water companies”.