That's not how it works. When CEO wants to take on big bet, he will typically need board approval. You can imagine Steve Jobs standing in board room and present

That's not how it works. When CEO wants to take on big bet, he will typically need board approval. You can imagine Steve Jobs standing in board room and presenting costs and promise of iPhone. If your board is all classic investor suits then they might not see through things. They can move to prevent CEO from spending big money because that would reflect in reduced earnings because of higher capex. I think this is one reason Google gets away with far larger R&D capex than Microsoft because their board has real tech folks and ex-founders.