"The board has confidence in the integrity of Doug Martin and sees no conflict of interest here," Carroll said.
Martin was also appointed as the independent head of the Government's working group on the three waters reform.
At the end of last year Opposition parties questioned the independence of Martin after the extent of his firm's involvement in the reforms was revealed.
One of the firm's current directors, Nick Davis, was contracted to the Government as the chief strategic director for reforms.
Carroll said the work that consultants from MartinJenkins was doing for the Government on three waters was considered entirely separate from the business of Wellington Water.
She said Martin had a reputation of fairness, integrity and high ethics, and was someone the public could trust.
Wellington City councillor Fleur Fitzsimons said she knew and respected Martin, who she considered to be a person of integrity.
However, she said she would have preferred to see a senior lawyer or retired judge involved as was often the case with such serious inquiries.
Carroll said the inquiry was into the business and management of Wellington Water's fluoridation operation.
The city council's infrastructure committee chairman councillor Sean Rush agreed a businessperson with Martin's expertise and independence was most appropriate for the job.
Councillor Diane Calvert questioned how many reviews and task forces there needed to be before water issues were fully understood.
"Public confidence in respect of Wellington's water infrastructure is at the very lowest level, not just with Wellington Water but also one of its main shareholding councils - Wellington City Council.
"Any investigation into the state of Wellington's water must be beyond approach to any suggestion of potential conflicts of interest or not getting to the real heart of the matters."
Calvert said the council should not shy away from any overall inquiry that other reviews could feed into.
"Wellingtonians, as do we all, want our water woes fixed once and for all."
The terms of reference for Wellington Water's independent inquiry into fluoride are yet to be made public.