I've been waiting for this Fast Company article to be free on the web. It's good stuff, and these guys do need to go (one of them already has!). Why they are allowed to stay around doesn't make sense to me, but here may be one explanation.
Although large institutional investors such as mutual funds, banks, and pension funds hold the biggest blocks of almost every one of America's public companies, the chances of their leading a public revolt against a bad CEO are mighty slim. Nor, despite conventional wisdom, is the tide turning. In a recent survey, just over half (55%) of big U.S. investors said they exert any influence over the management of the companies whose stock they hold. And that's actually down from 2000, when the number was 68%. The periodic exceptions are CalPERS, the California public pension system that names a watch list of troubled companies each year, and TIAA-CREF, which tries to push for change by meeting privately with CEOs and boards.
Large institutions are the major owners of these companies. It's time they started acting like it, and holding management responsible for their results.