When board members are reluctant to fire the CEO or other poorly performing managers, a corporation…

➤ How can investors and boards reduce managerial entrenchment?
Improve board independence, create clear performance metrics, and tie compensation to long-term results. Adopt annual director elections, enable proxy access, and limit staggered boards. Use independent nominating committees and regular CEO evaluations. Active institutional investors and disciplined governance policies increase accountability and make it easier to replace underperforming executives.