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For disaster as I said, watching the event helps (more events, think doubling costs means they get more stone/ food) and send someone for relief once. Doing that I haven't failed since.
Stability is a stat you can see under the Belief tab, and if that's low then it's going to keep getting lower every day. You can prevent this by sending Agents/Abbots with a high Battle skill.
If you look under the Agent tab you'll see the different stats of your Agency. You want Battle to be 15 to avoid stability loss in the future, and policy events can increase your stability stat by a fixed amount. Having 15 battle will get you the most possible benefit from these events, so it's not worth wasting the resources to get that number higher.