kaal:claim:1558614-005

Law generally declines to adopt a general principle barring managers from incurring risk above a defined standard because such a standard is hard to define; corporate law instead insulates managers' risk decisions through the business judgment rule.

The law does not do so in most instances because defining such a stan- dard is difficult. Corporate law instead protects the risk decisions of bank managers from challenge through a concept known as the "business judgment rule."

Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010), I.B. The Issues Confronting the United States and Germany, p. 10
https://ssrn.com/abstract=1558614 · source PDF

Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1558614

• outside the scope of rules that constrain specific named types of risk

conditionsupport: arguedfailure: undefinable risk standardfamily: definitional-ambiguityrisk-and-incentives

• contested_by kaal:claim:kaal-2013-acomparativeperspectiveo-012 Under German law, directors' business decisions lose the protection of the business judgment rule where the bu...

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