# kaal:claim:1558614-014

**Claim.** The U.S. governance structure, built on periodic disclosure of performance data and stock price maximization, encourages risk taking because managers feel compelled to meet shareholder expectations at every reporting interval.

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

**Holds when.**

- governance systems that emphasize periodic performance disclosure and stock price

**Source quote.**

> Risk taking in this context may be encour- aged by the perceived need to satisfy expectations of shareholders. Managers feel compelled to fulfill performance expectations whenev- er results are disclosed, be it quarterly, bi-annually, or annually.

**From.** Painter and Kaal, *Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in* (2010), III. Cultural Components of Risk Taking and Controlling Risk, page 21

**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.** risk-and-incentives, disclosure, corporate-governance

**Keywords.** short-termism, disclosure-incentives, shareholder-expectations, risk-taking

**Related claims.**

- extended_by: https://wulfkaal.github.io/claims/2922176-008

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