or most of the 1990's, shareholders had little reason to carp about the stewardship of their assets by company executives. Stock prices were rising; shareholders were content.

But much has happened since last year's annual meeting season, not the least of which is $5 trillion in lost stockholder wealth. Contentment has turned to distress as investors awaken from their bull-market torpor and ponder the actions of the commanders at the corporate helm.

All the numbers are not in from the current proxy season, but shareholders are clearly restless. Carol Bowie, director of corporate governance at the Investor Responsibility Research Center in Washington, reported that the number of shareholder proposals related to executive pay is up 24 percent this year. The proposals include capping executive pay, limiting golden parachutes and barring the repricing of options.

Shareholder opposition to companies' stock option plans that dilute existing owners' stakes is also rising. Ms. Bowie said that back in 1988, only 8.5 percent of the votes opposed stock option plans. Last year, opposition had risen to 21.8 percent.

These pockets of agitation may fire up the shareholder revolt against company executives and directors who were cavalier with stockholders' assets in recent years. It is high time these people are held accountable.

It was early in the 20th century that power began shifting away from the shareholders who own a company to the manager who runs it, said Richard Sylla, a professor of business history at New York University's Stern School of Business. Owners and managers were closely linked when companies were small. As they grew, so did the gulf between owners and stewards; although shareholders began agitating during the 1980's takeover era, owners today still have little say in the way their businesses are run.

This situation must change, said Gary Lutin, an investment banker at Lutin & Company in New York. Mr. Lutin, who is co-sponsor of a New York Society of Security Analysts forum on corporate governance that uses Amazon.com as a case study, said many corporate boards had lost sight of their responsibility to keep shareholders informed of how they are monitoring the company's management. "You'd expect a director to be accountable for betting the farm on an untested business model without any contingency plans," Mr. Lutin said, "or for relying on fantasy metrics like eyeballs and mind share to guide a business or to guide investors."

Boards at Internet companies were especially arrogant, at least until their stocks plunged. "There was a lot of hubris in the dot-com world about a new governance paradigm," said James E. Heard, chairman of Proxy Monitor, an institutional shareholder advisory firm in Bethesda, Md. "They pooh-poohed the need for outside oversight and accountability. If anything, there was more need for that in the dot-com world."

One way that shareholders can take back some power is to push companies to assess the effectiveness of their directors who are charged with monitoring management's performance on behalf of shareholders.

Peter Clapman, head of corporate governance at TIAA-CREF, the big institutional investor, said such evaluations by consulting firms could indicate whether boards were functioning effectively. "The number of companies that do this is a minority, in part because directors resent being judged," he said. "But there is a growing number that do it at the total board level."

A goal of Mr. Lutin's forum is to help investors find tools to make directors more accountable. For example, investors should know that Delaware corporate law gives them the right to inspect a company's books and records for a "purpose reasonably related to such person's interest as a stockholder." In today's world of corporate spin, this right has never been more crucial. 
 

A version of this article appeared in print on Sunday, April 29, 2001, on section 3 page 1 of the New York edition.