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Ofwat has set out its expectations for water companies on the information they must publish to demonstrate they are meeting the regulator’s principles for board leadership, transparency and governance.
In a shift of focus to corporate governance, Ofwat published its principles it expected water companies to follow in January 2014.
All water companies in England and Wales have told Ofwat they will have a code in place by April 1 2014 stating how the principles will be met. Some companies have already published their codes and are actively taking steps to meet the principles.
Ofwat expects all companies to meet the principles in full by April 1 2015.
In a statement Ofwat said: “If we are to deliver on a less intrusive approach to regulation, and the benefits that can bring, we need to be confident that companies are operating to the very highest standards of corporate governance.”
While the regulator has left it up to companies to choose how they demonstrate they meet the principles and will not offer a template that we expect companies to adhere to, Ofwat has provided some ideas on what the companies might do.
This might include, providing clarity in relation to: the composition and performance of Boards; the way in which director and executive pay is linked to the long-term performance of the company; and where the regulated company fits within the group to which it belongs.
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