[ci5er]

The VC, on the board, has a fiduciary responsibility to the shareholders: directly, his firm; the other shareholders, including the founders (!); and indirectly his LPs.

It is the board's responsibility to hire and fire executive management and as both a significant shareholder and board member, has the leverage to do so IF the other board members agree. It is almost never unilateral. Now - in the early-ish days of a company (say,pre-D series), the board is pretty small and pretty acquainted, so the guy who wants to fire you (the CEO) just places about 4 phone calls, and if everyone is on board, gets the ball rolling. Legally, it is a lot easier than it is with a public company or with someone with one of those weird split-stock-right things like Facebook.