What is the number 1 rule for Elf on the Shelf?

Could you elaborate on the so-called "number 1 rule" for the popular holiday tradition, "Elf on the Shelf"? I'm curious to understand the essence of this guideline, as it seems to be a cornerstone of the entire experience. Is it related to the elf's behavior, its placement, or perhaps a specific interaction with children? Clarifying this fundamental principle would greatly assist in understanding the full scope and purpose of this festive tradition.