That's because shareholders let them off the hook. The board represents the members (shareholders) of the company, they are responsible to them for the perform

That's because shareholders let them off the hook. The board represents the members (shareholders) of the company, they are responsible to them for the performance of their company, which reflects the investment in the equity. The CEO is an employee of the company. The power to set strategy may be delegated to him by the board, but the board is still responsible for it. Public companies have additional responsibilities of the board because they are also responsible to comply with the market's rules and government regulation (eg SEC regulations) that are stricter for public companies than private.