Yorkshire Water CEO Nicola Shaw steps down amid £1.3m payment controversy

Yorkshire Water’s chief executive, Nicola Shaw, is stepping down just 24 hours after the Environment Agency gave the firm the lowest possible environmental rating. According to the BBC, the regulator awarded the company one star out of four, classifying it as a "poorly performing company" ^[1].

The decision comes amid intense scrutiny of the water giant’s performance. Sky News confirmed the resignation was announced immediately following the downgrade, which highlights the severe challenges facing the utility ^[2]. Shaw, who has led the firm since 2022, stated that it was "the right time" to leave her post, describing her tenure as a privilege.

The Environment Agency reported that Yorkshire Water was responsible for significant pollution issues. While the BBC cited 260 incidents, The Mirror reported 335 pollution incidents in 2025, including 13 serious cases ^[3]. This high volume of failures led to the company being fined £1.2 million last year, as noted by The Independent ^[4]. Additionally, Ofwat had previously fined the company £47 million for historic sewage leaks.

Shaw’s departure also follows controversy over £1.3 million in undisclosed payments received between 2023 and 2025. The BBC reported that Shaw admitted failing to be transparent about these shareholder-funded payments had been a "mistake" ^[1]. The payments were made through Kelda Holdings, and the company insisted they were not paid by bill payers ^[4].

Nicola Medalova, a chartered environmental health officer who previously worked for National Grid, will replace Shaw. Medalova will join as chief executive-designate before assuming the role full-time in January, according to the BBC ^[1]. In a statement, Medalova expressed delight at joining the business and pledged a "relentless focus" on delivering for customers and the environment ^[4].

The broader water sector is also under fire. The Environment Agency rated eight of the nine water companies in England as "poor" or "requiring improvement" ^[3]. Alan Lovell, Chair of the Environment Agency, stated that water and sewerage companies continue to fall well short of standards demanded by the public. Meanwhile, campaign groups like 'Top of the Poops' have called for nationalisation, arguing the industry is extracting value from the common good while polluting waterways. Shaw’s exit marks the beginning of a transition period, with Medalova expected to join on Monday to begin getting up to speed.