Navigating the storm

Unprecedented climate-driven crises in New Zealand and globally in 2023 resulted in headlines and footage of our planet burning, or disappearing beneath flood waters. These have thrown a spotlight on the governance roles and responsibilities of business leaders.

Boardrooms, once confined to traditional audit and risk governance considerations, now grapple with unforeseen challenges like geopolitical disruptions, Covid-19, digital transformation and climate change.

In an era marked by escalating climate crises, board chairs are projected to become frontline climate ambassadors, bridging the gap between their organisations and stakeholders who are increasingly expected to demand meaningful planning and actions to address these challenges.

The role of effective crisis communication strategies, with oversight and guidance exerted by directors, will remain pivotal in safeguarding the resilience of organisations.

New Zealand company directors bear a legal and moral duty to exercise reasonable care, identifying and addressing foreseeable and material climate-related risks. These risks, intertwined with broader environmental concerns, require boards to consider their implications for business strategies and decision-making.

Climate risks become material when they directly affect operations, supply chains, asset values, security and business continuity.

The traditional role of directors in governing, providing strategic direction and monitoring performance is often likened to maintaining a ‘helicopter view’, where the board oversees the organisation from a higher-level perspective.

During a crisis, these dynamics can shift. The board chair and directors may need to temporarily ‘land the helicopter’ and engage more closely with the CEO and management team. By doing so, they can strengthen the crisis communications effort.

Robust risk analysis is the first step in preparing a strategy for responding to climate crises.

The board’s leadership role involves scanning and assessing the entity’s external environment, understanding its risks presented by climate change, including physical, regulatory, reputational and operational impacts.

During a recent workshop with communications professionals, sustainability practitioners and directors, it became evident that while many of us know that crises like droughts, floods and fires will impact our organisations, the challenges of addressing them is significant.

Recent evidence has also demonstrated the catastrophic consequences of putting those challenges in the too-hard basket. Failure by boards to exercise their leadership and ensure risks are well understood, and can have long-lasting material and reputational consequences.

Consider what happened when a governance entity – Auckland Council’s elected members – had to respond to an unprecedented flood event without the benefit of a disciplined climate crisis communications plan.

A review of Auckland Council’s response to the January 27, 2023, floods included findings that the council’s emergency management system – including plans, policies and procedures – was not prepared for an event of that magnitude and speed.

The review was also critical of communications between key players at the council and emergency management staff, and called out senior leaders for underestimating the importance of their visible leadership roles. The consequences of these governance and communications failures became starkly evident for Aucklanders on Anniversary Weekend and the following months.

Your board is not going to sit down and write a climate crisis communications plan. It does, however, have a duty to thoroughly understand your organisation’s climate risks.

It is important to dedicate time to workshop with management the likely impacts of these risks on your stakeholders and map them by priority, understanding who you need to communicate with, how, who is responsible and when.

Task management with creating a crisis communications plan that:

• Defines communications objectives and key messages
• Identifies your crisis response team and their roles
• Spells out the process for transitioning from crisis response to business as usual

As directors you must also ensure a clear delineation of board and management roles and responsibilities for each phase of a climate crisis communications scenario. Stress test the action plan through the rehearsal of a crisis scenario – not once, but with sufficient regularity to ensure that when the time comes, your organisation can be committed, competent, clear and confident.

In the face of a crisis, the board strategically engages in decision- making and crisis response to support management and mitigate the risk of senior leaders becoming overwhelmed by the demanding, round-the-clock nature of crisis management. The chair may also take the lead in orchestrating crisis efforts, acting as a vital link between management and the board to ensure decisive action.

Clear communication is the glue holding each piece of your plan in place. Communicating in the fast-paced, high pressure intensity of a full-blown crisis requires real discipline.

But what your stakeholders look for and need is remarkably simple:

1. They want to hear and see that an organisation is concerned
2. They want to know that it is committed to dealing with the issue at hand
3. They need to be confident the organisation has the competency to do so
4. They need that organisation to provide information with clarity, and that it demonstrates confidence in its words and actions.

The crises of 2023 have made it abundantly clear that climate-driven crises can no longer be relegated to a distant future but are a pressing reality.

By understanding climate-related risks and stewarding the development of a comprehensive crisis communications plan, boards can ensure readiness for an effective response to a climate crisis when – not if – it happens. 

Anthem is the Official Communications Partner of the IoD’s Chapter Zero New Zealand initiative, supporting directors with effective climate governance. To access a range of free climate resources, news and events, please visit chapterzero.nz