Opinion: Cyclone Gabrielle sends a message about accountability

Over the past five years, the climate discussion has accelerated in and around boardrooms in New Zealand, and directors have been urged to place climate change nearer the top of their agendas.

But regardless of the media consistently reporting rising sea levels and devastating global weather events, for some, climate governance perhaps still felt like a distant, abstract idea.

There’s the old nugget that if you can’t see it, it doesn’t exist. But with Cyclone Gabrielle causing huge devastation right before our eyes, the impacts of climate change are irrefutably impossible to ignore. Surely most people had already reached that conclusion ... but for those remaining late adopters, what additional evidence could possibly be needed?

Those living in low-lying Pacific atolls understand the urgency around extreme weather events — they’re tangible, resulting in flooded houses and people’s lives being thrown into disarray.

Now, the catastrophic impact of climate change has made its presence indelibly felt in Aotearoa.

The “tangible” aspect of this is significant because it drives the urgency around climate and creates a heightened awareness. From a governance perspective, this is one issue that has made its presence felt, and not only will it remain, but it will increase with impact.

Even in recent years, the messaging for directors has moved from “climate change” to “climate action and responsibility”, but perhaps there needs to be a swift transition to “climate accountability”.

“Holding to account” is an aspect of governance where an organisation might hold management to account, and the board will need to look at how it might do that. In addition, the good work of the External Reporting Board (XRB) seeks standards that hold organisations to account, which creates the right conversations with the right people.

But contrasted with a climate emergency that extends beyond the internal workings of an organisation, the point of contention is that some view climate as “a societal issue” that does not affect boards of directors because they see it as “externalised”.

This is where we need to go back to basic governance and the four pillars which address culture, determining purpose, holding to account and effective compliance. Directors need to scan for all of these in an increasingly unpredictable and volatile environment.

Let’s look at the Hawke’s Bay Recognised Seasonal Employment (RSE) workers caught up in the chaos during Cyclone Gabrielle. This is an interesting example because climate change has social, economic and environmental implications.

If asked who should be accountable for the welfare of those workers, or any others for that matter, it comes back to the mechanisms organisations are willing to put in place to protect the safety and wellbeing of their people in the first place.

Taking accountability in this situation means asking, what does good look like? But also, who is responsible for it, and what do we need to make that happen? These questions and associated mechanisms may already have been in place at an organisational level, and a significant weather event of that scale is going to have consequences regardless of how good your governance is.

The broader question at a societal level addresses whether we believe that looking after people within New Zealand in this way is important to us. If so, then the right conversations need to happen at the right time. But if an organisation doesn’t take action off the back of that discussion, it will remain nothing but a nice conversation.

Preparedness is also something strongly connected to accountability, and there are some sliding-door moments in the RSE workers’ story. Had there been casualties or serious injuries, the outcome would have been very different.

When something goes wrong in an organisation, directors are placed under the spotlight and are held to account. They are likely to be scrutinised by the media and the wider public.

Boards should view this scenario as a rich example to draw from. The lesson here is to look at it as “a near miss” — a key remit of governance is to assess the current and future landscape, and boards need to ask if they are comfortable with where they are at.

In an emergency situation where there are many unknowns, at an organisational level, the board and management need to consider whether their employees and contractors are a critical part of driving the organisation’s success, and how they are connected to its values.

And if you’re not doing well enough at an organisational level, the areas that are not performing need to be identified and a conversation needs to be had by the board. Boards and directors need to be really comfortable with these kinds of debates and New Zealand has the good fortune to be served by many that have the necessary skills.

If a board looks ahead at the types of conditions that might arise, and especially those that have high risks associated with them or behaviours they want to avoid, they are more likely to take that long-term, scenario planning toolkit with them.

Ultimately, the right conversation at the right time with the right people is everything.

- Dr Michael Fraser is a general manager at the Institute of Directors with a special interest in how learning experiences shape our leaders. He has lectured in social and environmental accounting at Victoria University of Wellington’s Business School.

The IoD hosts the New Zealand arm of Chapter Zero — Chapter Zero NZ — a global climate governance initiative that spans 50 countries and supports directors to take action on climate change at the board level.