Independent Directors Struggle to Protect Shareholders in Conflict Situations
Independent directors in companies are supposed to protect shareholders from managers who may act in their own interests. However, in cases of conflict of interest, these directors may not be able to stop managers, like CEOs, from prioritizing personal gain over shareholder benefit. This can lead to unfair advantages for managers at the expense of shareholders. When independent directors are actively involved in resolving conflicts, tensions can be reduced, and the company can function properly. It is crucial to address situations where independent directors are unable to fulfill their duty of safeguarding shareholders' interests.