# kaal:claim:1558614-009

**Claim.** The cost of tightening directors' duty to monitor risk depends not just on how far the requirement is tightened but on how it is tightened: the mix of agency enforcement versus civil litigation, and of substantive versus procedural change, drives the shape of the cost curve.

**Type.** mechanism  **Support.** argued

**Holds when.**

- illustrative model, not based on actual data

**Source quote.**

> from a cost perspective the way in which the monitoring requirement be- comes more stringent matters. The mix between agency enforcement and civil litigation matters; the mix between changes to substantive and procedural rules matters

**From.** Painter and Kaal, *Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in* (2010), II. Cost vs. Benefit from the Directors' Duty to Monitor Risk, page 15

**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

**Topics.** compliance

**Keywords.** duty-to-monitor, enforcement-design, regulatory-cost, procedural-rules

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