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Nomination committee members

  • Dr John McAdam (chair)
  • Dr Catherine Bell
  • Stephen Carter
  • Mark Clare
  • Brian May
  • Sara Weller
P58 Mcadam

Dr John McAdam
Chair of the nomination
committee

Quick facts

  • The Code requires that a 'majority of members of the nomination committee should be independent non-executive directors'
  • The role of the committee is to make recommendations to the board on its composition, balance and membership and on refreshing the membership of the board committees
  • The company secretary attends all meetings of the committee
  • The business services director, who has responsibility for human resources, regularly attends meetings and is responsible for engaging with executive search recruitment advisors
  • The CEO is not a member of the committee, but from time to time is invited to attend. Neither the Chairman nor the CEO would participate in the recruitment of their own successor

Quick links

Terms of reference – corporate.unitedutilities.com/corporate-governance

Dear shareholder,

We have, for the fourth successive year, undertaken the recruitment of a new non-executive director, which culminated in the appointment of Stephen Carter to the board on 1 September 2014.

We feel as we move forward into a new regulatory period that our directors have an excellent mix of skills and experience for leading the company into the new five-year period. The combination of relatively new directors, coupled with those that have served for a number of years, provides us with the benefit of new ideas, whilst not losing sight of what has gone in the past. We have maintained a 25 per cent gender diversity ratio, and the board gender diversity policy is taken into account during every candidate selection process. Ultimately, we strive to appoint the person we believe is best matched to the role in terms of what they have to offer the company and to make a positive contribution to the board conversation and board dynamics.

With the retirement of Nick Salmon, Mark Clare took over the role of senior independent director. When Stephen Carter joined the board he replaced Mark Clare as a member of the audit committee and Mark joined the remuneration committee.

Dr John McAdam
Chair of the nomination committee

We have maintained a 25 per cent gender diversity ratio and the board gender diversity policy is taken into account during every candidate selection process

Main responsibilities of the committee

  • Lead the process for board appointments and make recommendations to the board, including the company secretary
  • Consider the succession planning of directors and members of the executive team
  • Make recommendations to the board on refreshing the membership of the board's principal committees
  • Review directors' conflict authorisations
  • Consider the request from executive directors for election to the board of other companies and make a recommendation to the board
  • Consider requests from non-executive directors for the election to the boards of other companies; this role has been delegated to the Chairman (other than in respect of his own position)

What has been on the committee's agenda during the year

1. Board succession

The committee:

  • considered the succession requirements of the board;
  • appointed executive search consultants Russell Reynolds Associates (Russell Reynolds) to begin the process of the recruitment of a non-executive director and provided a brief to Russell Reynolds setting out the attributes of a preferred candidate;
  • considered and reviewed the long list of candidates and identified those to be shortlisted for interview initially with the Chairman, CEO and the business services director. A number of candidates were then invited to meet with the other non-executive directors and the CFO; and
  • discussed the candidates and the 'best fit' with the skills matrix (as shown below); took into account the board diversity policy and the specification provided to the executive search consultants; and duly made a recommendation to the board to appoint Stephen Carter as the successful candidate. Stephen brings to the board table a strong career in government and regulation, having held a number of public sector roles including serving a term as the founding chief executive of Ofcom. He is currently group chief executive at Informa plc, a FTSE 250 listed company.

Russell Reynolds is a signatory to the voluntary code of conduct on gender diversity for executive search firms; it has no other connection with the group other than being used on previous occasions for executive search purposes.

Skills matrix of board directors

Finance/
accounting
UtilitiesRegulationGovernment and
civil service
Construction/
engineering/
industrial
Customer
facing
FTSE
companies
John McAdam
Steve Mogford
Russ Houlden
Catherine Bell
Stephen Carter
Mark Clare
Brian May
Sara Weller

2. Refreshing the membership of the principal committees

Nick Salmon's departure from the board left a vacancy on each of the board's principal committees.

The conclusion was reached that this provided us with an opportunity to switch Mark Clare to the remuneration committee and to appoint Stephen Carter to the audit committee given his familiarity with the role of the audit committee from his time as a non-executive director at Informa plc. Stephen was also appointed as a member of the corporate responsibility committee.

3. Board diversity

We have retained the 25 per cent gender diversity ratio on our board, in accordance with our board diversity policy, and the recruitment process for a new non-executive director was in line with the policy in terms of gender diversity. Of the 10 candidates in the long list, two were female, and of the shortlist of four, one was female.

Whilst the committee was mindful of the benefits of gender diversity, it was felt that Stephen was the strongest candidate and had the most relevant experience.

We are keen to develop our female senior managers so that, over time, they can be considered for board appointments at United Utilities or as potential candidates for non-executive directorships in other companies. We believe a non-executive appointment provides an excellent opportunity for both personal and career development and is a way of gaining valuable experience that may be applied at United Utilities.

As is the case in many UK companies, certain activities remain more widely populated by men (e.g. in operational and engineering activities) or women (e.g. customer contact centre roles and support services). United Utilities is no exception, but we are continuing our activities to try and address gender imbalances at all levels and in all areas of our business.

4. Conflicts of interest

The company's articles of association contain provisions which permit unconflicted directors to authorise conflict situations. Each director is required to notify the Chairman of any potential conflict, and the board reviews the position of each director annually. No changes were recorded which would impact the independence of any of the directors.

5. Wider succession and talent management

As part of succession planning a number of changes were made to the membership of the executive team. The membership as a whole was reduced to nine (2014:12) including the CEO and CFO, with a ratio of six males to three females.

Q&A - Stephen Carter

Stephen Carter Large Page70

Gaining an insight into the culture of the company

How has your induction process so far been insightful?

My induction has provided a reassuring window into the company's culture. It has been thorough, detailed, professional and enjoyable. At all levels within the business, I have been met with individuals committed to delivering for their customers, open to change, and excited about the future of this industry.

Have your perceptions of United Utilities changed since you joined the board?

Like many people, I associate water and wastewater services with a simple turn of the tap or flush of the loo! The deeper I delve into the business, gaining a greater understanding of what lies behind the service delivery, the commitment to the environment, and the large capital demands placed on a business like United Utilities, the more I recognise the importance of a clear strategy, effective leadership and a coherent board providing oversight and constructive challenge.

In what way do you think you can best share your previous experience with United Utilities?

My experiences in technology industries and in regulation are directly relevant to United Utilities, today and even more so in the future. We are seeing the ever-increasing deployment of monitoring technology, increasingly demanding customers, both in business and residentially, and critically, a new regulatory landscape emerging across the water industry.

Having seen and participated in major regulatory change in another industry that was broadly successful and helped deliver, in both telecommunications and media, real investment, innovation and significant price reductions, I recognise the importance of ensuring that the incentives and the level of return are right for both consumers and the industry.

Finally, as CEO of a business that is facing a different set of challenges, but many the same, I hope to be able to contribute another perspective on leadership and strategy to the executive team.

Summary of board diversity policy

Ensure the selection process for board candidates provides access to a range of candidates, although any appointments will be made on the basis of equal merit but with due regard for the benefits of diversity on the board, including gender diversity

Ensure that the policies adopted by the group will, over time, promote gender diversity among senior managers who will in turn aspire to a board position

In selecting candidates for board positions, only use the services of executive search firms who have signed up to the voluntary code of conduct for executive search firms as recommended by Lord Davies

Adopt measurable objectives from time to time for achieving gender diversity at board level – which shall currently be to maintain at least 25 per cent female representation

What have we done in 2014/15

Improving gender diversity across the talent pool

Our graduate scheme continues to be successful in attracting female applicants. This year the number of female graduates offered roles with United Utilities increased to 42 per cent. The overall number of female graduates on the scheme has also increased from 35 per cent to 39 per cent.

In 2014, there was a 34 per cent increase in female applications to our apprentice scheme and an overall increase in the number of female apprentices joining the company. The 2014 intake was 25 per cent female and our overall apprentice population is now 14 per cent female. This is above the national industry average of seven per cent. Research from the Sector Skills Council for Science, Engineering and Manufacturing Technologies shows the average number of women in apprenticeships is between five and seven per cent.

In our executive team of nine (including the CEO and CFO), three are women, namely Sue Amies-King (business retail director), Sally Cabrini (business services director) and Gaynor Kenyon (corporate affairs director). We are actively working with these individuals on their personal development plans, which include building their external portfolio.

Women hold 23 per cent of senior leadership positions. For this group, we actively support their individual personal development plans, which include encouraging them to broaden their external network. We have run a number of successful events for our female talent population, including an Army leadership day. Gary Dixon, our domestic retail director and a member of our executive team, is the executive sponsor of our diversity activities.

This year we have launched our women's network and a number of our senior managers have hosted events and explained how they have developed their own careers and overcome barriers. In addition, we have invited guest speakers from external organisations to share their career experiences. This has inspired the group to set up a self-managed women's network group.

We have an active partnership with the Energy and Efficiency Industrial Partnership (EEIP) which has enabled us to leverage initiatives which align and support our diversity plans.

A great example of this is Charlotte Cottam, one of our female apprentices who we have nominated to support an EEIP skills social media campaign to promote employment opportunities in the utility sector to girls.

This campaign was launched at the opening of our Bolton training and technology centre by the then Employment Minister, Esther McVey. Charlotte was interviewed by media sources who then promoted her story in National Apprentice Week. All of our apprentices are supported by a senior manager as part of their career development with us.

71 Charlotte Cotta

Charlotte Cottam, apprentice engineer, working with the team looking after our sewer network on Merseyside

"What appealed to me about United Utilities is that it's such an important company. We're always going to need water – it's a vital commodity. I love being employed in a sector that I know has a long-term future."

 

We have widened our diversity focus and we have joined Race for Opportunity (RfO), part of Business in the Community and the leading organisation for ethnic diversity and inclusion.

In 2014, we participated in the RfO benchmarking survey which assesses the effectiveness of our policies and processes across recruitment, development, leadership, pay, and customer and supplier management. We achieved a bronze award. Our aspiration to improve our score in 2015 is underpinned by an action plan.

The employee-run lesbian, gay, bisexual and transgender network has recently been relaunched, and a number of employee events are being planned for 2015.

Case study – Jo Matzen , Area Business Manager

Jo Matzen, who has a degree in Biomedical Science, has worked for United Utilities for 20 years.

She started her career as a business analyst and has successfully progressed through a range of operational and technical roles.

Three years ago she was selected for one of the newly created area business manager (ABM) roles which form a key part of our operating model.

As an ABM, Jo is accountable for the effective and efficient delivery of the wastewater operations and asset planning across the Merseyside area. Within Jo's patch is Liverpool wastewater treatment works situated on the banks of the River Mersey. The facility has recently been refurbished and is in the process of being extended at a cost of around £200 million. Construction work is well underway; treated water leaving the new plant will be cleaner and greener, helping the continuing rejuvenation of the River Mersey and ensuring that it meets strict European standards for water quality.

Jo has actively mentored many colleagues at United Utilities throughout her time at the company and she continues to be committed to supporting others in developing their careers.

Jo says: "I thoroughly enjoy working for United Utilities and am extremely proud to work in such a vital service industry."

Pictured: Members of our female leadership talent pool taking part in a team building day with the Army at Fulwood Barracks in Preston. The day was designed to develop a range of leadership, communication and problem solving skills, all of which will be invaluable in their roles as future leaders of our business.