Ernst & Young LLP White Paper Advises Clients on Responding to Black Swan Events

ATLANTA, Aug. 25, 2011 /PRNewswire/ -- Black Swan events are unexpected, catastrophic and expensive, but the damage can be mitigated with proper planning.

Today, Ernst & Young LLP's Power & Utilities Advisory Services Practice released Responding to a Black Swan: Principles and protocols for responding to unexpected catastrophic events.

After witnessing the damage from the earthquake and tsunami that struck Japan's Fukushima Daiichi nuclear plant, Ernst & Young wanted to help business and utility leaders do what they could to minimize the impacts of negative, high-impact, low-probability events, should one occur.

"Japan had actually experienced tidal surges and natural disasters like this before, but the designers, builders, and operators of this nuclear plant did not believe the accident was even possible," said Nathan Ives, a senior manager in the Power & Utilities advisory practice of Ernst & Young LLP. "You don't expect a Black Swan event to happen, but you can adopt principles and protocols to guide your organization's response to lessen the impact."

Ives, author of Responding to a Black Swan, relied on the lessons he learned during his 19 years managing nuclear power plants and advising utility operators. He has extensive background in high-risk decision management and led the development of the nuclear industry's operational risk management performance standards while working at the Institute of Nuclear Power Operations.

Highlights from the paper include:

• Determine leadership and communicate. Effective response requires a single decision-maker and communication. Twenty-one minutes before the north tower of the World Trade Center collapsed, police warned each other via radio about the unsafe conditions. More than 100 firefighters never heard that warning and were not able to escape in time.
• Eschew politics. When stakes involve the loss of human life, turf wars and national pride have no place. After the 1986 explosion at the Chernobyl nuclear plant, Soviet authorities made the decision to say nothing. By the time radiation detectors in Europe began alarming, it was too late to alert millions of people who may have taken steps to avoid the first and most dangerous wave of exposure.  
• Confront ethical dilemmas. Tough trade-offs are inevitable in macro risk management.  This spring, flood gates on the swollen Mississippi River were opened to save New Orleans and Baton Rouge, but several upstream small towns and dozens of farms were wiped out.

The white paper is now being distributed to Ernst & Young's clients, including some of the world's largest utility operators.

Click here to download the paper.

About Ernst & Young's Advisory Services

The relationship between risk and performance improvement is an increasingly complex and central business challenge, with business performance directly connected to the recognition and effective management of risk. Whether your focus is on business transformation or sustaining achievement, having the right advisors on your side can make all the difference. Our 20,000 advisory professionals form one of the broadest global advisory networks of any professional organization, delivering seasoned multidisciplinary teams that work with our clients to deliver a powerful and superior client experience. We use proven, integrated methodologies to help you achieve your strategic priorities and make improvements that are sustainable for the longer term. We understand that, to achieve your potential as an organization, you require services that respond to your specific issues, so we bring our broad sector experience and deep subject matter knowledge to bear in a proactive and objective way. Above all, we are committed to measuring the gains and identifying where the strategy is delivering the value your business needs. It's how Ernst & Young makes a difference.

About Ernst & Young 

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 141,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. For more information, please visit www.ey.com.

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

This news release has been issued by Ernst & Young LLP, a US client-serving member firm of Ernst & Young Global Limited.

SOURCE Ernst & Young LLP

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