Covid-19

We’re better placed now than GFC or 1987

New Zealand’s businesses and government are far better prepared for the rapidly escalating global health and economic crisis than they were for the Global Financial Crisis in 2008-09 or the stock market crash in 1987, says Rob Campbell, one of the country’s most experienced corporate leaders.

“Executive teams and boards have swung into action, in my experience, remarkably quickly and effectively.” Likewise, the government is far more responsive now than it was when the prior crises hit. Then “it was much more a laggard and had no real procedures and actions in place.”

In a wide-ranging interview with Newsroom on Friday, Campbell offered many insights and observations about the crisis and what could flow from it, negative and positive.

He was drawing on his direct experience as chairman of SkyCity Entertainment, Tourism Holdings, Summerset Group (retirement homes) and WEL (electricity distribution), as a director of Precinct Properties (commercial real estate) and on conversations he’s had with other senior directors and executives across the economy in recent days.

Listen to the Campbell interview here.

Some of the main themes he discusses are:

- Events are moving very fast. “I’ve talked to all of the businesses I’m involved in this morning [Friday] and each one of those businesses has a new element which has arisen effectively overnight – not all entirely negative -- but elements you have to think ‘our plan at best had that possibility but we didn’t know we were facing it now’.”

- “Equity markets are not defining value in any meaningful way. Debt markets are in a deep level of confusion.”

- As a result, “taking a view on solvency is really hard” across the economy. “This makes all boards more risk averse.” Each company might be making the right decisions for it, “but that might not be ideal for the country.”

- Businesses are responding more effectively in this crisis because over recent years they have learnt to collaborate better internally, and externally with their suppliers and customers. They are also “having a more constructive relationship with government than they’ve had in past decades.”

- “The calibre of chief executives is really strong right now.” Many of them are change agents already remaking their businesses. Factors such as the rise of sustainability and income and gender equality were making their old models obsolete.

- Because the crisis is so deep and pervasive, many businesses can already see that their future will be quite different from the past. While they’re intently focused on dealing with enormous current challenges they’re also working on how to emerge as better businesses.

*Here's Rod Oram's latest column: Two Herculean efforts needed to restore the economy

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