Individual shareholders typically do not band together to oust a bad board of directors due to

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The high costs, both direct and indirect, of coordinating the effort for any individual or group of individual shareholders is a major hindrance to them banding together to oust a bad board of directors. Coordinating with other individual shareholders can be costly, as it requires significant time, effort, and financial resources. As a result, individual shareholders often choose not to take action against a bad board of directors, preferring to rely on the free market system to correct the problem or simply lacking knowledge of the board's behavior. While it is possible that some individual shareholders could be influenced by bribes from management, this is unlikely to be a significant factor in explaining why they do not band together to oust a bad board.

Individual Shareholders Typically Do Not Band Together to Oust a Bad