What the Andrew Moss ousting proves about the failings of regulation Shareholders have woken up to the fact, better late than never, that their ownership rights are being challenged, and indeed removed, by a Coalition government with a distinctly anti-business agenda. For decades, fund managers, who invest our savings and pensions, have treated boards and management as their agents when it comes to protecting shareholder value. That has proved inadequate and is being reversed. Institutions know that unless they take direct action over the stewardship of the companies they own, politicians will do it for them. Far from revealing a breakdown in relations between shareholders and boardrooms, events at Aviva (and a number of other companies including AstraZeneca, 3i and Trinity Mirror) show they are at last becoming robust. This should please both those who want to see the private sector thrive and those that want to see its power curtailed. But the relationship is not straightforward and while we want to see shareholders use their power and influence it would be a mistake to see UK quoted companies become characterised by precipitous decisions about management and strategy coming out of the blue. Shareholders need the ability to protest, in public and in private, while leaving a board time to adjust to prevailing views. Binding votes, as favoured by Vince Cable, on all proposals at an annual meeting could prove counter productive. We saw this with Aviva where Moss was re-elected with 95pc in favour yet shareholders were able to use the non-binding vote on pay as a protest vote and safety valve. Moss saw the writing on the wall and decided that, while he could have stayed on for another 6-12 months and try and turn both shareholders and strategy in his favour, he correctly decided he had lost the confidence of the company's owners - a realisation that will have been forced on him by The Sunday Telegraph's Business splash over the weekend. However, while making the vote on pay binding would remove that useful safety valve it would have the even more useful effect of forcing company chairman and other non-executives into greater dialogue with shareholders to ensure problems are properly aired in private before annual meetings. Perhaps that's where we're going. A greater degree of engagement between large shareholders and boardrooms throughout the year leading to decisions taken in the interests of investors without the need for the current round of angry protest votes at annual meetings. However, if these get togethers are to become relatively calm affairs again that will only happen if boardrooms listen to shareholders who in turn must get used to the idea of expressing their views to management rather than adopting the compliant and supine approach which has got us into this situation in the first place.