High‐level Management and Disaster

Corporate management must face not only the legal consequences of failing to manage risk adequately and to protect the public and the environment, but also the potential risks to profits and corporate reputations. There is thus an urgent need to understand organisational and industrial disasters better, and to suggest how strategic decisions makers can plan to prevent them. A formal systems methodology is applied to risk management problems. This approach is used to examine a number of case studies which cover a broad spectrum. All the case studies resulted in disastrous consequences either in terms of human suffering or for the environment. In addition, the financial and legal consequences for top management were severe. The failures of each system are examined, with particular reference to the role played by top management. It is suggested that all the failures can be analysed under three broad categories: organisational issues, human response issues and external factors. Specific strategies are suggested for each of these areas to assist corporate decision makers in disaster prevention.