TO THE BARRICADES.(shareholder activism)

In the 1956 comedy "The Solid Gold Cadillac,"Judy Holliday plays Laura Partridge, a small investor in the giant conglomerate International Projects who shows up at all of the shareholder meetings to badger executives about their bloated salaries. Weary of her griping, the executives put her on the company payroll, as its first-ever director of investor relations. Eventually, Partridge wises up and uses her new position to organize a shareholder revolt that topples the corrupt C.E.O. and his cronies.

Shareholder meetings are full of would-be Laura Partridges these days. Some of them are old-school: notorious pests like Evelyn Y. Davis, the seventy-three-year-old woman who has been tormenting C.E.O.s for decades, and Nick Rossi, the hardware-store owner who was escorted out of Safeway's annual meeting last year after he threw a crumpled-up program at the company's general counsel. (Once Rossi was removed, the general counsel implored "Miss Davis"to be quiet, too. "It's Mrs. Davis,"she replied. "I've had three husbands.") But shareholder activism has now gone mainstream: more than a thousand shareholder resolutions have been filed this year (up thirty per cent from last year), most of them attempts to reform the way executives get paid or the way a company is run. In the past, such resolutions were voted down, but this year dozens have been approved. At Avon, investors voted to force the company's board of directors to be reelected annually. At Delta Air Lines and Kimberly-Clark, they voted to have the companies treat stock options as an expense. And at Hewlett-Packard and Verizon they voted to curb golden parachutes.

The boom in shareholder activism is a response, of course, to the recent corporate scandals and the bursting of the stock-market bubble. During the bull market, investors got lazy, leaving shareholder-rights advocacy to the gadflies and the geeks. What point was there in worrying about such numbing matters as staggered boards and cumulative voting when everyone was getting rich? The disasters at Enron and Tyco changed all that, and it has become fashionable again to question the judgment of the C.E.O., especially when the issue is how much the C.E.O. ought to be paid.

It's one thing to raise questions, and another to get results. "The Solid Gold Cadillac"is a nice fairy tale, but in the real world the American system is not very friendly to shareholders. All the proposals that shareholders "adopted"this spring, for instance, are nonbinding. Companies are free to ignore them. Shareholders in Apple Computer voted in April for a resolution requiring the company to expense stock options. Last month, Apple announced that it would not do so, though it did state, graciously, that it "appreciates and takes seriously the views expressed by . . . shareholders."

American corporations get away with this disregard because of the way corporate governance ...