Executive Summary
Boards face a delicate balancing act when it comes to handing star CEOs who provide large benefits but expose the company to great risk; they have to fire a CEO who acts unethically, but they can’t fire a CEO just for exposing the company to risk. And because CEOs have to take risks in order to create value, directors have to strike a balance that maximizes the benefits and minimizes the dangers of a risky CEO.
Star CEOs can be good for companies, providing social proof that their firm is a high quality place and making it easier to attract…
