The regulation, governance and performance of the water and sewerage industry in England and Wales

Regulation of the privatized water industry of England and Wales has failed across several dimensions, with illegal discharges into waterways, widespread non-compliance with environmental requirements and large-scale extraction of cash from the businesses. Analysis of the nature of these regulatory failures finds inappropriate corporate governance to be a major contributor, with the shareholder value paradigm creating damaging incentives for poor behaviour. Recent regulatory changes focus on introducing a 'corporate purpose' approach to governance, and the paper considers whether they will be enough to improve future performance.