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Whenever you hear someone talk about how democratic U.S. corporations are, make sure you correct them. Gretchen Morgenson of the NY Times has been writing on this issue for years. Corporations, which are supposed to be owned by its shareholders, really don't answer to anyone except its board members. Case in point - this recent article, which starts:

Investors may have hoped that the Securities and Exchange Commission would do the right thing and allow them a much more active role in governance matters at their companies. Ownership usually brings certain rights, after all.

But it seems clearer by the day that in the next month or so, when the commission acts on a rule change relating to director elections, it will instead curtail investor rights. This, by the way, comes, from the agency that calls itself the investor's advocate.

To give you an idea of how arcane the system is now, Gretchen writes:

As owners, shareholders should be able to nominate directors to a company's board when current representatives are failing in their fiduciary duties. A 2006 decision by the United States Court of Appeals for the Second Circuit in a case that the American Federation of State, County and Municipal Employees pension fund brought against American International Group opened the door to this. It essentially granted investors the right to submit proposals related to director elections that all shareholders could vote on. Before this decision, investors could only nominate corporate directors by mounting an arduous and expensive proxy battle.

Naturally, corporate America takes the opposite view on shareholder access to the proxy.

Surprised? Hardly...Read on for the rest...

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