Why independent chairs matter for water governance

As local government grapples with ongoing water services reform and increasing expectations for performance and accountability, a strong governance model is essential.

Under the Local Government (Water Services) Bill, local authorities can choose the water services model that best suits their needs. For some, this will include establishing an in-house business unit within the council – a model that retains both local ownership and democratic accountability through direct elected member decision making.

For those considering this approach, the appointment of an independent chair to the committee overseeing water services is a smart governance move that brings objectivity, skill and credibility to a high-risk and high-profile area of council activity.

Independent chairs aren’t a new idea. They’re a mainstay of Audit and Risk Committees where their presence is recognised as key to good governance – strengthening transparency, supporting decision-making and managing financial and operational risks. The same logic applies to water services.

An independent chair can bring subject matter expertise and impartiality, helping navigate the technical, regulatory and long-term investment challenges that water services inevitably present. This is especially important for in-house business units where political direction and operational execution must be carefully balanced.

Appointing an independent chair doesn’t dilute council oversight – it strengthens it. Independent governance provides transparency, specialist oversight and greater assurance that the interests of current and future communities are being protected.

In our submission on the Local Government (Water Services) Bill, the Institute of Directors noted that using an independent chair in in-house business units would provide an added level of rigour and assurance. Independent leadership can help ensure decisions are driven by performance data, risk profiles and long-term outcomes – rather than short-term pressures or election cycles. At a time when the public (and government) is increasingly focused on water quality, climate resilience and infrastructure investment, demonstrating competent, neutral oversight builds trust.

This approach is already used successfully in other local government contexts, including council-controlled organisations (CCOs) and Audit and Risk Committees. Following guidance from the Office of the Auditor-General, Audit and Risk Committees – that focus on governance best practice and oversight – generally include an independent chair to help councils manage risk and meet compliance obligations. Their value lies in bringing an external, impartial perspective to oversight, helping councils manage financial and reputational risk while meeting compliance obligations.

Similarly, an independent chair of an in-house business unit can support evidence-based decision-making, enable effective long-term planning and ensure compliance with regulatory standards remains a top priority.

Water services are complex, highly regulated, and capital-intensive. They’re deeply tied to community wellbeing – from environmental sustainability and public health to intergenerational infrastructure investment. That demands technical, financial, regulatory and governance expertise that not all councils can access from within. Independent chairs can bring deep sector knowledge and governance capability that complements – not competes with – elected members.

They can ask the right questions, focus on strategic outcomes, and ensure risk and compliance are treated seriously. Their presence also builds capability across the governance table, fostering stronger collaboration between elected members and operational leaders.

In the report Governance and accountability of Council-Controlled Organisations, the Auditor-General emphasised that the success of CCOs hinges on relationships built on mutual trust and respect, and on having the right people with the right skills at the table. The same holds true for in-house business units.

Public trust in water infrastructure isn’t just about clean drinking water – It’s about confidence that decisions are being made in the public interest, based on good data and long-term thinking. The Auditor-General’s paper Public accountability: A matter of trust and confidence highlights the importance of demonstrating competence, reliability, and honesty - attributes that can be strengthened through independent oversight.

While each council will decide what governance model works best for its community, those establishing an in-house business unit should consider the value an independent chair could bring. It’s a practical, proven way to lift capability, provide assurance, and support better outcomes.

Water is too important to leave to chance. It demands clarity, consistency, and competence - and that starts at the governance table.