The shareholders are uninformed and disorganized. They might take their money out but that will take a long time. Meanwhile, management and the board control the flow of information and can take decisions together.
In theory reality and theory are the same. In reality they are not. In my org there are a lot of pms who don’t do very much and somehow just happen to be friends and former room-mates of the org head.
The concept of a voting shareholder is a myth. Most shares are owned/managed by funds so they are the true voters. They just vote to make sure the that the boat isn’t rocked too much.
The modern system favors executives as opposed to owners. The executive class has figured out how to extract a significant chuck from to owners share for their own coffers.
I am sure shareholders are demanding that in many places but they are demanding it from the people who provide no value themselves and who are perfectly positioned to inflate their importance and perceived value-add.
That's like asking the corrupt politicians to uproot corruption. Obviously it will never work.
So the shareholders get bulshitted exactly by the people who are very likely superfluous.
Those lovely market forces largely stop applying at corporation boundaries.
Besides, information is so wildly far from perfect in all spheres that we rarely see anything particularly close to the extremes of efficient behavior predicted by spherical-cow market fairy tales anyway, even when market forces are fully in-play.
That sounds like a lovely version of capitalism, but the one I've experienced is anything but optimized. There can be incentives to keeping around unproductive jobs, the size and stability of an org can often be used as a basic sign of health.
