Rain, hail and pestilence

As the country begins to emerge from the general state of shock that hit us all in January and February, Cathy Parker says there are often valuable, fresh insights to be gained from dealing with a crisis.

Another year and another plague on the house of New Zealand! People and businesses seem to just get through one crisis and then there is another.

The effects have come, not just from any direct damage due to flooding or wind damage to business premises, but also longer-term issues. Many areas were still cut off a week after Cyclone Gabrielle due to damage to roading and bridges. Or, if there was access, it was often a slow and circuitous route which delayed, or stopped, transport, stifled tourist visits and made life generally difficult.

Even in areas that were not directly affected there are shortages of some products which come from the cut-off regions. Some relatively major roads may take a year or more to reopen (State Highway 25A from Kopu to Hikuai is one example).

On top of that there is a general state of shock affecting most of the country. Even for those less affected, there seems to be no chance to recover one’s equilibrium/mental health between challenges.

So what are some of the governance issues? These can be split into the short-term issues to address but also long term as while New Zealand has faced similar cyclone damage in the past (Cyclone Bola for example) the strength and frequency is likely to increase as general warming from climate change increases average ocean temperatures which, in turn, drive the intensity of the cyclones.

The Institute of Directors has produced a good online resource for directors entitled After the Storm. IoD notes that it is still important that boards keep to governance rather than hands on, and provide guidance for management on delegation so they can proceed at pace where needed and know what needs to be referred back to the board.

In the short term some issues to consider are:
•    Staff safety both in the workplace and at home. Look at getting staff safely home before major weather events reduce travel during and immediately after, and ensure health and safety is in place for staff that have to work during weather events.
•    Business clean-up and insurance. If you are directly affected you need to institute clean up processes and insurance claims.
•    Staff mental health: Ensure managers keep in touch with staff, make sure they know who is directly affected or have friends or family affected. Look to provide time off as needed to sort out any direct issues and then what mental health support the business has in place such as an employee assistance programme.
•    Is there a risk of financial failure due to the crisis? In which case the board needs to closely monitor this and if required seek expert outside guidance.
Longer term issues include:
•    Do you need to make adjustments to your premises to reduce the risk of future flood damage? Or consider moving to a different location?
•    What are the potential risks from the effects of climate change which might result in more frequent and severe weather events, and increased sea levels which might worsen flooding in coastal areas.
•  What are the logistical risks going forward of either one of your business locations being cut off for some time
(how would you operate?) or being cut off from a key supplier for a period of time?

We should also never forget Winston Churchill who said: “Never let a good crisis go to waste.” Meaning there is often valuable, fresh insights generated from dealing with a crisis.  

Cathy Parker is the director of Adrenalin Publishing, the owner of Management magazine. She also sits on a number of boards.

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