- Yorkshire Water was given a one-star rating by the Environment Agency, its lowest possible assessment
- The company recorded 335 pollution incidents in 2025, including 13 classified as serious
- Shaw's departure follows criticism over £1.3m in shareholder-funded payments made between 2023 and 2025
Yorkshire Water chief executive Nicola Shaw is to step down in January, just a day after the company received the lowest possible environmental rating from the Environment Agency (EA).
Shaw, who has led the water supplier since 2022, will leave the role on January 1. Nicola Medalova, a former National Grid executive and chartered environmental health officer, will join the company next week as chief executive-designate before taking over fully in the new year.
The leadership change comes as Yorkshire Water faces renewed pressure over its environmental record, sewage pollution and the treatment of its customers.
In its latest assessment, the EA downgraded the company's environmental performance from two stars to one out of four, classifying it as a poorly performing water company.
The regulator recorded 335 pollution incidents involving Yorkshire Water in 2025, including 13 serious incidents. The company was also fined a total of £1.2m last year over pollution incidents.
In a statement, Shaw said it had been a privilege to lead the business but that the time was right for an orderly transition.
“It has been a privilege to lead Yorkshire Water and serve the people of Yorkshire,” she said.
“Although there remains a huge amount of work to do, I am extremely proud of what our colleagues have achieved, putting the business on a stronger footing for delivery across all aspects of its work.”
Who will replace Nicola Shaw?
Medalova will begin working with the company during a transition period before becoming chief executive in January.
She previously worked at National Grid and is a chartered environmental health officer. Her appointment comes at a difficult time for the water supplier, which serves more than five million people across Yorkshire.
Medalova said she was looking forward to leading the business through its next phase, while acknowledging the scale of the challenges ahead.
“Yorkshire Water faces huge challenges but also great opportunities for continued improvement,” she said.
She added that she would work with the leadership team and employees to deliver better outcomes for customers, communities and the environment.
The new chief executive will inherit pressure to improve pollution performance, strengthen environmental compliance and restore public confidence in the company.
Why has Yorkshire Water faced scrutiny?
Shaw's departure also follows criticism over £1.3m in payments made to her between 2023 and 2025 through Kelda Holdings, a Jersey-incorporated company.
The payments were funded by shareholders rather than customers. However, their disclosure attracted criticism, particularly as the company faced questions over its performance and the use of customer money.
In December 2025, Shaw acknowledged that failing to be transparent about the payments had been a mistake, while saying the decision over the amounts was not hers to make.
The payments had come to wider attention in August 2025, when the government moved to prevent Yorkshire Water and five other water companies from paying what it described as unfair bonuses to executives.
The company was also fined £47m by water regulator Ofwat in 2024 over historic sewage leaks.
The latest one-star environmental rating adds to the pressure on Yorkshire Water's leadership. Its new chief executive will face the task of improving the company's environmental record while addressing long-running concerns over pollution and accountability.
