Abstract
The importance of the degree in providing access to the highest corporate positions gives rise in France to the regular presence of social ties between CEOs and directors based on a common education. The objective of this study is to analyze the consequences of these social ties on the firm's risk-taking. Our results show that these ties lead to a decrease in corporate risk-taking that is all the more significant that the CEO’s tenure is long. These results are robust to the use of alternative measures of risk. They are also reflected in the firm’s lower growth and valuation. Our study underlines the agency conflict between the CEO and shareholders regarding the level of corporate risk-taking, and the effect of social ties in exacerbating this conflict.