Chapter 3

A Better Way to Manage Risk

A manager makes a racially insensitive remark during an interview. An employee is sexually harassed on the job. A customer’s privacy is compromised. Mistakes and misconduct are a near constant in our lives. For recent evidence, look no further than Volkswagen, Uber, Wells Fargo, Harvey Weinstein, Google, Facebook and the litany of financial and civil indiscretions that keep the world’s blogs and newspapers perennially full of bad news.

In a world where everyone is connected nearly all the time, even one-time mistakes can yield disastrous consequences. And as the cases above make clear, those consequences cannot be safely quarantined to an individual bad actor. Instead, in the most salacious cases, the public ...

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