Extreme weather is testing board resilience

Extreme weather is becoming a defining feature of New Zealand’s operating environment, with increasing implications for households, communities, infrastructure and the organisations directors are responsible for governing. 

Kris Faafoi

Recent data released by insurer IAG revealed that from last autumn to this summer, a storm event occurred somewhere in the country about every eight days. 

New Zealanders are acutely aware of this risk. Recent polling commissioned by the Insurance Council of New Zealand (ICNZ) revealed 71% agree that natural disasters are likely to become more serious and frequent. 

That expectation is already being borne out. In January, communities across the upper North Island and East Cape experienced torrential rain, flooding and landslips that damaged homes, cut power and roads, isolated towns and tragically cost lives. 

For many families, this was not a once-in-a-generation event. In mid-February, the pattern repeated. Severe storms swept through Waikato and parts of the central and lower North Island, flooding homes, damaging roads and cutting off communities. 

The same system later hit the South Island’s Banks Peninsula, where heavy rain and slips again closed roads and isolated residents. 

In March, Northland bore the brunt of another round of extreme weather. In April, Cyclone Vaianu struck parts of the North Island, followed a week later by another severe weather system that brought fatal and destructive flooding to Wellington. 

All these events were separate, but they share the same underlying drivers and the same consequences for people, property and infrastructure. 

This raises a critical governance issue: what does good governance look like when climate-related risks are no longer occasional shocks, but repeated and material? 

Some questions are obvious. What happened? How do we recover? How do we protect ourselves from this in the future? 

Those are important questions given the increasing frequency of extreme weather events. 

But for boards, a recovery-only lens is no longer sufficient. Effective governance now requires understanding how these risks affect long-term strategy, asset values, organisational viability and community resilience. 

What makes this pattern even more concerning is how often New Zealand is now declaring states of emergency. 

National Emergency Management Agency data shows the number of days spent under declared emergencies has increased sharply in recent years, driven largely by severe weather. 

In just the first four months of 2026, there were at least 130 days when parts of the country were under a local state of emergency. Northland, Waikato, Bay of Plenty and Manawatū-Whanganui declared multiple emergencies in that time. 

Over the past five years, New Zealand has averaged more than two months each year under some form of declared emergency. 

From an insurance perspective, these events are no longer exceptional. They reflect a clear shift towards more frequent and widespread weather-related disruption, particularly affecting smaller and rural communities that are often already exposed. 

Insurance plays a critical role in recovery. It helps families repair, communities recover and regions regain stability after disaster strikes. 

It also provides an increasingly important signal to boards. Insurance reflects the changing risk profile of places and assets, and increasingly shapes long-term decisions about investment, development and resilience. 

However, New Zealand collectively has an opportunity to think and act differently to reduce the impact of natural disasters. 

To keep people safe, protect communities and ensure New Zealanders can keep accessing insurance in the future, we have the chance to act decisively on risk reduction. 

Every destructive weather event reinforces the same lesson. Cleaning up after disasters costs far more than reducing risk upfront. 

A Climate Change Commission case study showed the Awanui Flood Protection Scheme in Kaitāia, built for $15 million, has already avoided an estimated $50 million in damage. 

The benefits continue every time floods occur. Northland Regional Council estimates March’s deluge pushed almost twice the volume of water through the Awanui River compared with the catastrophic 1958 flood, with the scheme saving lives and preventing millions of dollars in damage. 

Elsewhere, the evidence is just as clear. In Hawke’s Bay, the $4 million Taradale stopbank improvements, completed before Cyclone Gabrielle, were assessed as preventing billions of dollars in damage to around 10,000 properties. 

These examples show the value of acting early and the longer-term benefits of investing in resilience before disaster strikes. 

In many places, strong decisions are being made to protect communities, but what is needed to ensure families, businesses and community organisations are preparing themselves for disasters?  

Strong leadership from central and local government is a starting point. Robust, coordinated action such as clear planning rules and sustained investment in resilience sends a powerful signal that risk is being taken seriously. 

We have high levels of insurance coverage by international standards and strong public support for acting early to reduce risk, even when that involves difficult conversations about land use and change. 

ICNZ-commissioned polling also found 87% of New Zealanders favour early action to protect communities from natural disasters. The data is clear and public sentiment is aligned with early intervention.  

This presents a critical governance moment for directors. Boards have a central role in ensuring climate-related considerations are embedded into decision-making, that longer-term risks are actively overseen, and that today’s choices do not lock in tomorrow’s losses.  

Acting early is not just good risk management. It is increasingly a core responsibility of effective governance.

The views expressed in this article are those of the author and do not necessarily reflect the views of the Institute of Directors.