The job of effectively involved shareholders can be simply described as ensuring that the board of directors does its job. This means making sure that the right people are on the board, that they are focusing on the right issues, and that they operate under a structure that enables them to ask the right questions and reach the right answers. This is the answer to the agency costs issues, the most effective way for the ownership to exercise the appropriate level of control.
While the culture and law have improved director effectiveness, there are still significant barriers to prevent shareholders from holding board members accountable when they fail to hold managers accountable