Preparing for Low-Probability High-Impact Events

Systematic preparation for a highly unlikely catastrophe “is not morbid thinking or gloom-and-doom prognosticating, but rather a crucial planning feature in a turbulent world,” writes Ben W. Heineman Jr., Harvard professor and former chief legal officer at General Electric. This article in Today’s General Counsel is an adapted excerpt from his book, The Inside Counsel Revolution: Resolving the Partner-Guardian Tension. Drawing lessons from the Fukushima disaster in Japan, Heineman recommends that business leaders, and general counsel in particular, engage in a process called scenario planning, and that for especially high-impact scenarios they take it a step further with another protocol, adapted from the tradition of military war-games.