Managerial investment decisions put shareholder capital at risk. Shareholders respond either (i) by preserving the manager's discretion to choose among projects but decreasing the power of his (her) incentives, thereby decreasing the manager's gains from choosing risky projects, or (ii) by imposing a constraint on the type of project that the manager can undertake. We show that capital exposure—the extent to which managerial decisions put shareholder capital at risk—plays a central role in favoring the imposition of a constraint over the granting of discretion. We extend our analysis to consider other determinants of the choice between discretion and constraint.

中文翻译：

---

管理自由裁量权和股东资本风险

管理投资决策将股东资本置于风险之中。股东的反应是 (i) 保留经理在项目中选择的自由裁量权，但降低他（她）的激励力度，从而减少经理从选择风险项目中获得的收益，或 (ii) 对项目类型施加限制经理可以承担。我们表明，资本风险——管理决策将股东资本置于风险之中的程度——在支持对授予自由裁量权施加约束方面发挥着核心作用。我们扩展我们的分析以考虑在自由裁量权和约束之间进行选择的其他决定因素。