After the wave of accounting scandals of big firms in 2000s, the topic regarding the impact of board composition and board characteristics on firm economic outcomes has become increasingly vital not only to senior managers and policy makers but also to academics. Yet relatively little attention has been given to how the social relationship between the board and the CEO affects firm risk taking and performance. In this study, I examine the impact of social ties (friendship ties) between the board and the CEO on firm risk taking and performance based on a sample of US listed firms over the period of 2000 to 2014. Employing four theoretical frameworks, namely, agency theory, stewardship theory, social similarity theory and social network theory in a multi-method empirical study, I document a number of interesting findings. First, I find that social ties between the board and the CEO have a positive impact on firm risk taking, indicating that board-CEO social networks create a friendly investment environment for the CEO and engender firm risk taking. Second, my results reveal that board CEO friendship ties have a negative and economically meaningful impact on firm value, as measured by Tobin’s Q and Total Q. Regarding potential channels of firm value differentials, I show that the negative influence of board-CEO friendship ties on firm value is reduced in firms with greater board advising requirements but intensified in firms with higher board monitoring needs. To address endogeneity concerns, I employ deaths and retirements of friendship-tied directors as instrumental variables. Overall, the results remain robust even after controlling for board-CEO professional ties and using alternative model specifications. This study has both theoretical and policy implications. I contribute to recent literature considering how board-CEO social ties influence firm risk taking and performance and help reconcile ambiguous theoretical predictions as to how board-CEO friendship ties impact firm decision making and performance. The results also imply that network ties are of considerable importance and that regulators, legislators and investors should take board-CEO social ties, particularly friendship ties, into account when evaluating the efficacy of firm corporate governance structures. Thus, I recommend that legislators explicitly account for board-CEO social ties in future regulatory acts, as well as supporting firms’ disclosure of board-CEO social ties.