Strong governance is one of the core areas through which we create shareholder value and build and maintain a sustainable business. Part of the role of the Chair and the Board is to ensure that Pennon Group operates to the highest standards of corporate governance.
- Governance Framework
- Internal Control
- Remuneration
- Diversity
- Modern Slavery Act
- Tax Strategy
- s.172 Subsidiary Statements
- Articles of Association
The Board and its governance framework
The Group’s Board and Committee structure, together with its risk management and internal control systems, forms an effective and robust governance framework designed to manage and develop the Group in accordance with the Group’s strategy to maintain and grow shareholder value.
The Board of Directors comprises the Chair, four Non-Executive Directors and two Executive Directors. All of the Non-Executive Directors are considered by the Board to be independent.
The Board acts as the main governing body for the purpose of oversight for the Group with additional supervision of the regulated business of South West Water being provided by South West Water’s own board.
Read more about the Board of Directors
The Board has a schedule of matters reserved for its decision, which include:
- approval of the full year and half year results announcements;
- the approval of the Annual Report & Accounts (including the financial statements);
- all acquisitions and disposals;
- major items of capital expenditure;
- authority levels for other expenditure;
- risk management process and monitoring of risks;
- approval of the strategic plan and annual operating budgets;
- Group policies, procedures and delegations; and
- appointments to the Board and its Committees.
Download the Matters reserved for the Board (PDF)
The Board delegates more detailed consideration of certain matters to Board Committees, to the Executive Management of Pennon Group, South West Water or Pennon Water Services, as appropriate, or to the Group General Counsel & Company Secretary. The Committees and Executive Management have detailed terms of reference setting out their responsibilities, accountabilities and reporting obligations to the Board.
Internal Control
The Board is responsible for maintaining the Group’s system of internal control to safeguard shareholders’ investment and the Group’s assets and for reviewing its effectiveness. The system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. There is an ongoing process for identifying, evaluating and managing the significant risks faced by the Group.
Read about Internal Control in the Annual Report and Accounts 2024
Pennon’s Code of Conduct sets out the standards and behaviours that the Group expects of its workers. Other policies, including those covering anti-bribery & corruption, anti-facilitation of tax evasion, gifts & hospitality, conflicts of interest, regulatory and compliance, anti-modern slavery and human rights and whistleblowing sit alongside the Code. Any allegations of misconduct and irregularity are investigated thoroughly.
Download the Group’s Whistleblowing Policy
Download the Group’s policy on Anti-Bribery and Corruption
Download the Group’s policy on Gifts & Hospitality
Download the Group’s policy on Anti-Facilitation of Tax Evasion
Download the Group’s policy on Conflicts of Interest
Download the Group’s policy on Regulatory and Compliance
Download the Group’s policy on Anti-Modern Slavery and Human Rights
Directors' Remuneration Policy
Our current remuneration policy was approved at the 2020 AGM, receiving support of over 91% of shareholders who voted.
The proposed revised policy is published as part of the Directors’ remuneration report within the 2020 Annual Report.
View the Directors’ Remuneration Report 2024
2021 LTIP Performance Measures
The performance measures for the 2021 LTIP, as agreed by the Remuneration Committee, can be viewed here.
Payments to former Directors
Statements made by the Company in accordance with section 430 (2B) of the Companies Act 2006 are set out below.
Board Diversity Policy
The Board’s diversity policy confirms that the Board is committed to:
- The search for Board candidates being conducted, and appointments made, on merit, against objective criteria whilst promoting the widest forms of diversity including gender, social and ethnicity. In this context, the Board will endeavour to achieve and maintain:
- A minimum of 40% female representation on the Board
- A minimum of 40% female representation on the Group’s senior management team
- Satisfying itself that plans are in place for orderly succession of appointments to the Board and to senior leadership
- Maintain an appropriate balance of skills and experience within the Group and on the Board and to ensure progressive refreshing of the Board.
There has never been a more important time for responsible businesses to promote the widest level of diversity in the boardroom and beyond and the Board takes its leadership of this important topic very seriously.
Pennon is only one of a few FTSE businesses in the UK to have both a female Chief Executive and Chair. We continue to make progress in gender diversity across the Group. As at the 31 March 2022, gender diversity stood at:
- Board - 43%
- Pennon Executive - 50%
- Senior Management - 45%
This focus on diversity positioned us 10th in the FTSE 250 Women Leaders Review.
As advocates of Sir John Parker’s review for ethnic board diversity, and in meeting the target ahead of 2021, we were also early signatories of the Change the Race Ratio. Alongside this, we have continued our membership of the 30% club, and South West Water has once again contributed to the industry’s Women in Water initiative. The Group’s wider workforce diversity is currently 29.5%. Championing diversity, equity and inclusion remains an important priority of the Nomination Committee.
Read more on the Group’s diversity approach and data in our Annual Report.
Download our Gender and Ethnicity Pay Gap Report:
Read Our Change the Race Ratio Commitments here.
Our people are fundamental to our business and we remain committed and passionate about ensuring our employees, customers and communities can thrive by creating an environment where everyone can feel safe and supported. We have a clear zero-tolerance approach to modern slavery and are committed to playing our part in helping eradicate it by having systems and processes to monitor, assess and reduce the risk of forced labour and human trafficking.
Like any successful business, we work hard to be efficient and effective in order to deliver the best possible result for customers, communities and shareholders. We have the same approach when it comes to tax.
With regards to tax, we make sure we follow both the letter and the spirit of the law. This means filing all our returns on time and making all tax payments by the due date, and also considering how tax fits into every major business decision.
Companies like ours have an important role to play in enhancing people’s understanding of taxation, what companies pay, and why. At Pennon, we know the taxes we pay help fund vital public services, investment in people and investment in infrastructure to support future growth. The UK would not be the country it is without the tax contributions of business of all sizes, operating in all sectors.
Download Contributing to society through a responsible approach to tax here
The Companies (Miscellaneous Reporting) Regulations 2018 (the “Regulations”) require Pennon Group plc and a number of its subsidiaries to publish a statement explaining how the Directors of these entities have given due regard for the matters set out in section 172 (1) (a) to (f) of the Companies Act 2006 while performing their duty to promote the success of the Company for the benefit of its members as a whole ("s.172 statement"). The Regulations also require certain entities to provide details on their corporate governance arrangements. The subsidiary statutory accounts, below, include the relevant statements that are captured by the Regulations.
The Pennon Group plc s.172 statement can be found on page 128 of the 2024 Annual Report and Accounts.
South West Water Limited
Bristol Water plc
Pennon Water Services
