Board leadership


We first introduced principles for board leadership, transparency and governance in January 2014. They aimed to give companies ownership and drive noticeable improvements in their governance arrangements. They also emphasised the importance of strong board leadership and the special responsibilities attached to regulated water companies providing an essential public service.

Subsequent developments in the sector and wider economy reinforced the important role of effective corporate governance and strong board leadership in driving high standards and securing the proper discharge of regulated water companies’ functions. This led us to revise the principles in January 2019.

The principles

Under the revised principles, which came into effect on 1 April 2019, we set out four high-level objectives companies should deliver:

  • The regulated company board 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 regulated company has an effective board with full responsibility for all aspects of the regulated company’s business for the long term.
  • The board’s leadership and approach to transparency and governance engenders trust in the regulated company and ensures accountability for their actions.
  • Boards and their committees are competent, well run, and have sufficient independent membership, ensuring they can make high quality decisions that address diverse customer and stakeholder needs.

It is the responsibility of companies to take ownership for delivering the objectives and actively consider how best to do so. This is supported by companies’ licences which contain a requirement, introduced on 1 August 2019, for them to meet the objectives and explain how they are doing so.

We have also set out guiding provisions underpinning each objective, which we would normally expect companies to adopt in the course of meeting the objectives.

Read our report on how companies are meeting the principles.