Ofwat says the appointment of Farnish will provide the board with consumer expertise as it battles to keep water bills down through its price review process.
Farnish will join the Ofwat Board in January, following the appointment of Christopher Burchell, Martin Lawrence and Professor Catherine Waddams in May 2013.
She is currently a Civil Service commissioner and chair of Consumer Futures until the transfer of its remaining work to the Citizens Advice service in March 2014.
Prior to that, she was a managing director at Barclays, chief executive at the National Association of Pension Funds and consumer director at the Financial Services Authority and OFTEL.
Ofwat’s chief executive of Ofwat, Cathryn Ross, who took up her post in October, has also appointed three directors, completing the regulator’s new executive team.
They follow Sonia Brown’s promotion to chief regulation officer in the summer. Ofwat is also currently in the process of recruiting a general counsel.
Jonson Cox, Ofwat’s chairman, said: “Customers, the industry and investors have told us that they rely on a strong, independent and robust regulator. All these appointments, executive and non-executive, together with those earlier in the year, play a vital role in rebuilding Ofwat’s capability.
“Christine has an impressive range of public and private sector experience. In particular, her consumer expertise will be invaluable.”