# kaal:claim:1558614-005

**Claim.** 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.

**Type.** condition  **Support.** argued

**Holds when.**

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

**Source quote.**

> 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."

**From.** 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, page 10

**Cite as.** 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

**Verify.** sha256 of source PDF `e898211630f4116879329d6de8397523dca5b066864147421aa5cbc7429dc83b` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Painter%20and%20Kaal%20-%202010%20-%20Initial%20Reflections%20on%20an%20Evolving%20Standard%20Constraints%20on%20Risk%20Taking%20by%20Directors%20and%20Officers%20in.pdf

**Failure mode.** undefinable risk standard  (family: definitional-ambiguity)

**Topics.** risk-and-incentives

**Keywords.** business-judgment-rule, excessive-risk, standard-setting, corporate-law

**Related claims.**

- contested_by: https://wulfkaal.github.io/claims/kaal-2013-acomparativeperspectiveo-012

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.