The fact that they are undertaken at all indicates how much more benefit will result from monitoring without free-rider leakage. It is a structural change that will provide ongoing benefits to any widely held firm. If a CEO can populate a board with friends, then making one of them chairperson doesn't solve the basic problem. These enforce a limit on mismanagement, but their high cost still permits a great deal of waste. Furthermore, the firm may gradually slide back into inefficiency in the years following such a restructuring.
Corporate monitoring is less costly and more permanent.
Back to question list 8 . If the CEO somehow maintained dominance of the board and remained chairperson, the CMF could bring specific pressure to rectify that. Back to question list 9 . The majority of a firm's owners must be in favor for corporate monitoring to be adopted. The main question is whether investors will benefit from having more influence over who is on the board of directors.