# kaal:claim:2486570-024

**Claim.** The threat of bad press, reputational harm, legal costs, stock price declines, and the cost of implementing mandated governance changes can partly substitute for the weak direct incentives, pushing boards and management to optimize governance and keep the entity out of an agreement.

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

**Source quote.**

> the cost of implementing N/DPA governance changes can help counteract lack- ing incentives for boards and management to optimize governance and protect the entity from entering into a N/DPA.

**From.** Wulf A. Kaal, Timothy Lacine, *The Effect of Deferred and Non-Prosecution Agreements on Corporate Governance Evidence from 1993-20* (2014), VI.B. IMPLICATIONS FOR BOARDS, MANAGEMENT, AND LEGAL COUNSEL, page 55

**Cite as.** Wulf A. Kaal, Timothy Lacine, The Effect of Deferred and Non-Prosecution Agreements on Corporate Governance Evidence from 1993-20 (2014). SSRN: https://ssrn.com/abstract=2486570

**Verify.** sha256 of source PDF `8c3981c9a55d8a3fe59a01660584eebc3feb3fb9109ca65344095bebe4ae49a4` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Lacine%20-%202014%20-%20The%20Effect%20of%20Deferred%20and%20Non-Prosecution%20Agreements%20on%20Corporate%20Governance%20Evidence%20from%201993-20.pdf

**Topics.** reputation, risk-and-incentives, governance-design, corporate-governance

**Keywords.** reputational-harm, incentives, deterrence, corporate-governance

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