Using a parsimonious setup, we shed light on two channels through which a small amount of social pressure exerted by a CEO on board directors may increase the company value even in the absence of the classic tradeoff between the board's monitoring and advising tasks. First, the pressure reduces...

We study how interest alignment between CEOs and corporate boards influences investment efficiency and identify a novel force behind the benefit of misaligned preferences. Our model entails a CEO who encounters a project, gathers investment-relevant information, and decides whether or not to...

In their role as initiators of new business projects, CEOs have an advantage over access to and control over project-related information. This exacerbates pre-existing agency frictions and may lead to investment inefficiencies. To counteract this challenge, incentive compensation for corporate...