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How Companies Should Take Responsibility for Accidents

Yale Insights notes the worst industrial accidents “turn into a sort of cultural shorthand that casts a lasting shadow over companies: Three-Mile Island, the Exxon Valdez, Rana Plaza, the Deepwater Horizon oil spill, Fukushima.”

“Handling disasters is complex. Firms must respond to the effects of the crisis on human life and the environment while demonstrating accountability within legal and social frameworks. At the same time, they must manage ongoing business operations and revive what may be a severely damaged brand.”

A critical aspect of the response is to be seen as taking responsibility. Gita Johar writes in the MIT Sloan Management Review, “Companies have to manage consumers’ attributions of blame, as well as their thoughts about the future of the brand, by providing them with a clear narrative that answers their questions about the crisis.”

Something as simple as an expression of regret can have a real impact. “Various studies suggest that apologies can prevent lawsuits from being filed altogether, and increase the likelihood and speed of settlement for those that do arise,” notes Jeff Helmreich in the Cornell Journal of Law and Public Policy.

In an insightful interview, Tokyo Electric Power Company President Naomi Hirose, the operator of the Fukushima Daiichi nuclear power plant, discusses his company’s efforts since the 2011 tsunami and nuclear meltdown.