Mr Short is also a non executive director with United Biscuits, a job he has done since May 1992.
He takes up his new role at a time of increasing uncertainty for the group, which has been the subject of persistent takeover speculation. The company's performance has been unexciting over recent years.
Mr Short first joined the board of ICI in 1990 as finance director. In June 1994 he became responsible for the eastern hemisphere. He retires from ICI in April. His salary terms have yet to be agreed with United Biscuits, but he can anticipate one of the best pay deals for a non-executive chairman of a British company when he steps into Sir Robert's shoes.
Sir Robert's £160,000 salary compares to an average of £57,000 paid to non-executive chairman of Britain's largest companies for an average of 30 days a year work, according to a recent survey by Sedgwick Noble Lowndes.
Sir Robert is said by the company to work an average of two and a half days a week. He stepped down as an executive director in March 1994.
Sir Robert has no plans to retire as chairman of Thames Water, a job which currently pays him £143,666 a year.
United Biscuits yesterday moved to clarify claims that its directors stand to gain shares valued at up to £715,000 this year. Directors will not benefit under the company's long term incentive scheme this year as the company has not met its earnings growth targets.