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France stands out for the restricted number of highly prestigious schools in which most of its business elites are trained. This inevitably leads to the existence of close ties between the CEO and other board members. These school ties impede the monitoring function of the board of directors and do not incentivize the CEO to develop the firm’s specific assets in view of enhancing its competitive advantages. The result is an increase in systematic risk, especially when the firm has few growth opportunities and uses low leverage. However, the presence of a large shareholder and greater coverage by financial analysts can serve as alternative control mechanisms capable of mitigating the effect of school ties between the CEO and board members. Taken together, our results underline the problems linked to social ties and suggest that governance codes should take them into account. JEL classification codes: G31, G34, D21