At around 4am on Saturday 4 September 2010 an earthquake of 7.1 on the Richter scale occurred near Christchurch, New Zealand. It caused substantial damage to the city and Canterbury region. Five months later, Cantabrians had become used to the aftershocks and largely settled back into their routines. Businesses opened as normal all over Christchurch city on Tuesday 22 February 2011. No one could have predicted what was about to happen.
Within 4 hours, a magnitude 6.3 earthquake would kill 185 people, render unsafe many inner city buildings and destroy much of its infrastructure. A cordon was placed around 6,000 businesses in the red exclusion zone. No-one was allowed in or out, even to retrieve belongings including important items vital to business. It was considered too dangerous. An estimated 64% Christchurch city businesses were forced to close temporarily.
Gradually parts of the red zone were made safe and owners could finally be accompanied by geotechnical engineers to go in and collect essential files and servers from their premises. Many had to wait months to collect their belongings. The median duration of closure for organisations following the February earthquake was found to be 16 days. At least 11% of Christchurch businesses did not survive the disruption and closed their doors permanently.
Emergency preparedness is one of the most challenging risks that any business has to face. So challenging it is that many leaders simply ignore it hoping that it will not affect them. Unfortunately, as many within the Christchurch CBD found this approach was to prove terminal. And yet for a median business to survive, all they needed was a plan for how to get through the next 16 days without having any physical access to their premises. Many businesses that had systems and files in the cloud, were up and running again within hours of the February quake using replacement computers operating out of temporary premises.
Emergency preparedness and response is an essential part of running a sustainable business today. It is one of the requirements of ISO 14001, the international standard for environmental management systems. Organisations worldwide have paid much more attention to how they manage during times of disruption and emergency especially since the Christchurch earthquakes and also the 2011 Fukushima Daiichi nuclear disaster following the Tohuku earthquake and tsunami.
The identification and management of existing and prospective risks including emergencies is a key part of assuring compliance in any business. Compliance is one of the four pillars of effective board governance. No board should take emergency preparedness and response lightly.
How sustainable is your business? Is it like one of the 11% of businesses within the Christchurch CBD that did not survive the February quake, or have you assessed the disruption risks to your business and prepared for such emergencies?
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