The article discusses how companies can attract the best CEO by addressing two main problems: adverse selection and moral hazard. Adverse selection is about choosing the right candidate, while moral hazard is ensuring they continue to perform well after being hired. For example, when hiring someone like James Bond, the government must select a candidate willing to kill for the country and ensure they don't slack off once hired. Bond may exaggerate the difficulty of his assignments to prolong his exciting lifestyle, posing a challenge for the government.