# Duty to monitor `kaal:entity:duty-to-monitor` **Status.** derived This node is assembled mechanically from the 6 claims that carry the concept tag `duty-to-monitor`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 6 claims across 1 works, 2010 to 2010. **2010** - [1558614-009](https://wulfkaal.github.io/claims/1558614-009) [mechanism/argued] -- 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. > 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 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 - [1558614-010](https://wulfkaal.github.io/claims/1558614-010) [mechanism/argued] -- The same combination of substantive and procedural rules imposes different monitoring costs in different cultural settings, so a rule package that is cheap in one country can be expensive in another. > The cultural context also matters; a particular combination of substantive and procedural rules in one setting—for example, the U.S.—may result in a sharply rising solid line whereas the same combination in another setting 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 - [1558614-031](https://wulfkaal.github.io/claims/1558614-031) [mechanism/argued] -- The United States compensates for its lenient corporate law treatment of risk taking under the business judgment rule with a comparatively strict disclosure regime and a robust securities class action litigation regime; substantive corporate law pushes the monitoring requirement toward leniency while securities enforcement pushes it back toward stringency. > In sum, what the United States lacks in its lenient approach to risk taking in the application of the business judgment rule the Unit- ed States may make up for with its relatively strict disclosure regime and robust securities class action litigation regime. 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 - [1558614-032](https://wulfkaal.github.io/claims/1558614-032) [mechanism/argued] -- In the United States the duty to disclose risk indirectly generates risk monitoring, because directors who know they are responsible for disclosing risk have reason to monitor it even though corporate law imposes no explicit duty to monitor. > Directors thus may monitor for risk because they know they are responsible for dis- closing it. 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 - [1558614-039](https://wulfkaal.github.io/claims/1558614-039) [mechanism/argued] -- Delaware courts have not explicitly imposed a duty to monitor risk, but that omission may be moot: because failing to disclose risk violates federal securities law, unmonitored risk is likely to become undisclosed risk and therefore actionable. > In the United States, Delaware courts have not explicitly im- posed a duty to monitor risk. Because failure to disclose risk is a vi- olation of federal securities laws, however, this may be a moot point. Unmonitored risk is likely to be undisclosed risk. 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 - [1558614-040](https://wulfkaal.github.io/claims/1558614-040) [predictive/argued] -- Because of the political climate and concern about the social externalities of business failure, monitoring requirements and their enforcement procedures are likely to become more severe regardless of whether the increased monitoring costs are offset by fewer bad business decisions. > The severity of the substantive moni- toring requirement and the procedures used to enforce it may in- crease regardless of net costs to the company. 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 Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/duty-to-monitor.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.