Hello Obert,

first you would have to define a little bit more what you exactly mean.

What type of company are we talking about: a stock traded company with public share holders, a stock non-traded company with private share holders, a limited company in private hands, ... meaning what kind of shareholders are you targeting?

When you say director, do you mean actually the executive board below the supervisiory board --> typcially CEO/managing director or one level below?

Please be more specific with 'oversee'. Are we talking about disciplinary issues or more entrepreneurial guidance?

What do you mean by management? CTO, CFO, CSO as peers or 1 or 2 management levels downwards?

While the questions raised by Walter holds, i like to add on a general note that shareholders may not be able to wield any direct influence on management; the only option is to confront the inactive or docile directors during AGM and possibly have them dethroned.

From a mere theoretical perspective shareholders, as "owners" and major risk holders, are those stakeholders who "hold" the power to appoint the management team and executives. This power is normative and supported by the legal system. Of course reality may show you that things not always fit theory description, thus shareholders may find difficult to exert their powers whether cost, resources and other environment constraints exceed sharehoders benefits from acting.

When you are referring to MD and Executive Director, certainly they hold direct responsibility to the daily operation of the business and to closely monitoring the management performance. If it is on entire BOD may not be the case.

On the shareholders' power, it depends on the size of shares that they hold. The bigger the more the power they have. Some how as an individual the power may not be able to be exercised immediately, but until the general meeting. Even if they sit in the Board, seldom they will have that frequent meeting to influence the company's decision.

Bigger issue is related to the quality of governance.

The complexity of the business operations, the size of organisation and the legal documents that underpin the relationship between Directors/management and articles of association will determine the recourse for shareholders.

It is very difficult to "proof" that directors did not oversee management. It all has to do with performance targets - are they met or not? who is to blame? And when you blame - can you back it up with solid facts? Labour law issues also come into play.

In a public limited company, the non-performing directors can be removed as per the relevant provisions of the companies’ act of the country where the company is registered.

In India, any director can be removed by an ordinary resolution of the general meeting under the applicable provisions of the Companies Act.  A company may by ordinary resolution at a meeting remove a director before the expiration of his period of office, notwithstanding anything in any agreement between it and him. A court may make a recommendation to the central government for issuing disqualification order prohibiting the person from acting as a director of a company, or being involved in the management of any company, for the period of the disqualification. It is difficult for the share holders to ascertain that a particular director did not oversee the management, as companies are run by Board of directors, according to the memorandum and articles of association and the company performance is intimated to the share holders in the annual general meeting.

Indian companies act gives enough power to Government  to intervene if omiisions and negligence is serious. if their is fraud done by them corporate veil can be lifted by High court in India.Mostly large shareholders likie financial Institution wield enough power to dislodge bad directors.