In This Review

Mastering Catastrophic Risk: How Companies Are Coping With Disruption
Mastering Catastrophic Risk: How Companies Are Coping With Disruption
By Howard Kunreuther and Michael Useem
Oxford University Press, 2018, 248 pp

This interesting book uses interviews and case studies from the business world to identify 21 categories of risk faced by publicly traded companies and to draw useful lessons about how to prepare for them. The categories cover not only natural disasters, such as earthquakes and tsunamis, but also risks arising from employee behavior, regulations, and financial shocks caused by human error or by the wider political, social, and economic environments. The resulting damage can be physical, financial, or reputational. The authors urge corporations to plan for potentially catastrophic incidents, even remote ones, and to train teams to deal with unexpected events when they occur. The authors offer many concrete examples of companies that dealt successfully with the unforeseen, and of ones that failed, and show how those that did better had learned from the experience of others.