About Consultation
This consultation invites views on how Ofwat should introduce new rules on remuneration and governance, provided for in the Government’s Water (Special Measures) Bill. The document sets out our considerations and initial proposals on how Ofwat should introduce the following rules required by the new legislation:
- a rule to prohibit performance related executive pay where company performance fails to meet specified standards;
- a rule to require companies to test whether individuals in senior roles meet standards of ‘fitness and propriety’; and
- a rule to ensure companies have arrangements for involving consumers in company decision-making.
The rules will apply to the 16 largest companies holding an appointment as a water and/or sewerage undertaker under the Water Industry Act 1991 collectively referred to as ‘water companies’ or ‘companies’ in this document. We are considering whether the rules should apply to new appointees (otherwise known as NAVs) and set out our current proposals in section 5.
Ofwat will use the feedback provided through this consultation to inform the design of these rules and related guidance. We intend to implement the rules via further statutory consultations.
Responding to our consultation
This consultation closed on Tuesday 19 November 2024.
If you would like to understand more about this consultation, please watch our recent webinar where we explained the consultation’s proposals and the intended outcomes from the policy.