The Terms of Reference for the Southern Water Independent Customer Challenge Group (the CCG) has been agreed by the CCG and the Southern Water Board.
They are based upon the Company proposals outlined in the Southern Water Business Plan for 2015-20 (AMP6) and the Ofwat Customer Engagement Policy Statement and Expectations of PR19 (May 2016).
The CCG will have three primary functions.
To provide challenge and advice to the Board on the approach to the selection of bathing waters for action during AMP6.
In addition to the above, and in light of recent Ofwat publications around the issue of vulnerability and affordability, the CCG will take on an additional advisory role providing advice and challenge around Southern Water’s affordability work.
The Customer Challenge Group (CCG) shall be the name used for all functions and in all reports. The specific functions regarding PR19 are subject to Ofwat guidance and requirements and will be updated accordingly as and when required.
The first duty of the CCG will be to work with the Company during PR19 to provide independent challenge to the Company and independent assurance to Ofwat on:
The CCG is an independent panel. Its authority to carry out its duties as outlined in these Terms of Reference is given by the Board with regard to the AMP6, and by Ofwat with regard to the requirements for PR19.
The CCG will meet at least four times a year with members of the Executive Management Team (EMT) and, as a minimum, the CCG Chair will attend Southern Water Board meetings at least twice a year to provide a formal report on the CCG’s work and its view on the Company’s performance in relation to the duties of the CCG.
The CCG Chair has open access to the Board Chairman and other NEDs, who are also invited to attend a CCG meeting should they wish.
The CCG Chair is recruited using a best practice recruitment and selection process, including advertising. The Chair is appointed by the Chief Executive Officer (CEO) of Southern Water on behalf of the Board. The Chair of the CCG is independent of all other interests in the Company and acts in an individual capacity.
The Chair has a job description which includes responsibility for shaping agendas and commissioning papers for the CCG meetings.
An independent search agency is employed to help identify and select appropriate members, who are interviewed by the Chair and CEO and appointed by the CCG Chair, in consultation with the CEO. Members have a job description which lays out their responsibilities.
Membership of the CCG is constructed to provide it with a wide range of knowledge and experience of the issues affecting customers within the Company’s region of operation, the water sector, the UK utilities sector, and the wider economy.
Additionally, each member of the CCG will possess significant knowledge in one or more of the following areas:
CCG members are both independent of the Company and are appointed on an individual basis. CCG members are not appointed to represent any particular organisation nor specific interest group. Members are appointed based on their background, expertise and experience. The sole exception is that a representative for CCWater is included amongst the members of the group as required by Ofwat.
A conflicts of interest register is maintained and published on the web site. Any specific conflicts of interest which members think they may have, following a change of circumstances or in relation to specific agenda items in meetings or in any other way which could conflict with their role as a member of the CCG, are identified and recorded in meetings.
Members of the CCG will be expected to attend all meetings in person (deputies are not permitted). The Chair is contracted on a retainer basis (with a fee that is in line with Board NED fees and on the expectation of making up to a day a week available for CCG business) and CCG members are paid a day rate for attendance at meetings. The Chair and all members are reimbursed for all reasonable expenses incurred in relation to their membership of the CCG.
Including the Chair, the CCG membership will be between 8-12 people.
The quorum necessary for the transaction of business shall be five. In the absence of the Chair, the Chair may nominate a deputy to chair a meeting. If the Chair is unable to do so, the members may elect a Chair for the meeting. A duly convened meeting of the CCG at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in, or exercisable, by the CCG.
To ensure its efficient operation the Company will provide a sufficient secretariat function for the CCG.
The CCG shall meet, as a minimum, six times a year.
Meetings of the CCG, other than those regularly scheduled as above, shall be summoned by the Secretary of the CCG at the direction of the Chair.
Meeting dates, times and venues shall be advised no less than twenty-one days in advance of the meeting. In exceptional circumstances, meetings can be called at shorter notice, at the discretion of the CCG Chair.
Unless otherwise agreed, meetings shall take place at Southern Water premises. Unless otherwise agreed, an agenda of items to be discussed and supporting papers shall be forwarded to each member of the CCG and any other person required to attend, no later than seven days before the date of the meeting.
Any three members may request an urgent meeting by writing to the Chair. The request should specify the purpose of the meeting. The discretion to allow such a meeting rests with the Chair.
The Secretary shall minute the proceedings and resolutions of all meetings of the CCG, including recording the names of all those present and in attendance. Minutes of meetings shall be circulated promptly to all members of the CCG for agreement.
Other bodies or individuals can be invited to attend CCG meetings as observers. Observers can participate in discussions but are not members of the CCG. Observers can be asked to leave the meeting during periods when the information being discussed is of a sensitive or confidential nature.
Invitations to observers to attend CCG meetings are at the discretion of the CCG Chair.
The quality regulators (Environment Agency, Drinking Water Inspectorate and Natural England) will be invited to attend the CCG from time to time (and no less than once a year) to report directly to the CCG on the company performance against statutory objectives. These regulators are also invited to request attendance at the CCG at any time they consider helpful or appropriate.
The CCG will have a website address (www.southernwater.co.uk/customer-challenge-group) embedded within the company website. There will be a presumption of publication on this website for all materials relating to the CCG; including in particular:
The CCG shall be responsible for periodic reviews of its operational performance and, at least annually, review these Terms of Reference to ensure it is operating at maximum effectiveness. The CCG will recommend any changes it considers necessary to the Southern Water Board for approval.
The Southern Water Board is not obliged to adopt all of the recommendations or act in response to all of the challenges from the CCG. Where this is the case, the Board will publish its reasons.