The cost of waiting for certainty on infrastructure

Boards waiting for certainty before making major infrastructure decisions risk narrowing their choices and increasing the eventual cost. 

At the IoD 2026 Leadership Conference, a Chapter Zero New Zealand panel examined how directors should weigh climate risk, affordability and long-term value when approving assets that may remain in service for decades. 

Facilitator and Chapter Zero New Zealand lead Judene Edgar MNZM, CMInstD was joined by infrastructure director Raveen Jaduram CMInstD, director and Waikato dairy farmer Brent Goldsack and experienced chair and non-executive director Cassandra Crowley MInstD. 

One clear warning was that boards seeking certainty and clarity would fail because governance required hard decisions based on imperfect information. Boards still needed to test their assumptions, prepare for several outcomes and retain room to change course. 

Jaduram said directors needed sufficient knowledge of the organisation and its operations to assess what management placed before them. 

“If you don’t understand the present, there’s very little chance you’ll understand the future,” he said. 

Management usually develops infrastructure proposals because it holds the operational knowledge, he said. Boards must create a culture in which executives feel able to raise issues extending beyond current budgets and immediate business requirements. 

Directors then need enough understanding to test the scope of a project and distinguish essential investment from additions that increase costs without delivering the intended result. 

Jaduram pointed to Auckland’s Central Interceptor, a 16.2km wastewater tunnel running beneath Auckland and the Manukau Harbour, recalling that the project’s origins stretched back to his time as a junior engineer. 

Over several decades, policy, technology, funding and public expectations can all change. Crowley pointed to a related tension: reporting cycles and director terms are measured in years, while infrastructure decisions may outlast any individual director’s tenure. 

The long view still has to meet immediate financial realities. Goldsack said economic viability remained fundamental to adaptation. An organisation unable to operate profitably could not keep investing in lower-emission technology or more reliable infrastructure. 

Drawing on his experience with Fonterra, he described decisions about replacing coal used to produce the consistent heat required for milk processing. Gas had appeared to be an attractive alternative, but the company could not obtain the long-term supply certainty it needed. It moved instead to wood pellets at one site, with better economic and operational results than initially expected. 

Hydrogen had also been trialled for heavy transport but remained uneconomic compared with diesel. Electric tankers offered a stronger financial case and the company continued working through the operational difficulties. 

“Don’t be afraid to make decisions,” Goldsack said. He also urged boards to stay curious and seek out people with a different view. 

Crowley said the consequences of under-investment often extended beyond the organisation making the funding decision. Communities, suppliers, customers and other parts of a national network could bear the cost of failed infrastructure. An investment might therefore appear unattractive when assessed as a single asset, even though it reduced much larger risks across the wider system. 

That made preventive spending difficult to assess. When investment stopped homes from flooding, maintained electricity supply or kept a transport route open, the loss it prevented did not appear as a financial return to the organisation paying for it. 

Crowley said boards should map the infrastructure and relationships their organisations depended on, identify points of fragility and consider where redundancy could be created. In some cases, that might involve sharing backup capacity with another organisation, including a competitor. 

Scenario modelling could help boards test how several risks might interact. Crowley described how the board at a travel insurance company she chairs moved beyond choosing between individual options. Instead, it considered different worlds involving severe weather, natural hazards and geopolitical disruption. 

She also questioned the emphasis placed on efficiency in traditional business thinking. Infrastructure built with little spare capacity may perform efficiently under expected conditions but struggle when those conditions change. 

The discussion exposed a tension in board composition. Jaduram argued boards needed directors who understood the business in front of them. 

Crowley also saw value in people who brought an outsider’s perspective and were prepared to challenge accepted practice. Infrastructure boards need industry knowledge without allowing familiarity to close down questions about assumptions that may no longer hold.