This week's extraordinary decision by the Securities and Exchange Commission to let companies deny shareholders access to annual proxy ballots is another victory for the bosses and companies like General Motors and Bank of America in their effort to block investors from gaining more say over director nominations.

The claims by SEC chairman Christopher Cox that it's protecting the rights of shareholder is absurd. The bottom line is this: even if they had proxy access, dissident shareholders would still need to secure the votes of a majority of shareholders to change the board. The majority can still vote the other way. Someone should tell Cox that it's called democracy.

Professor Randal C Picker's Legal Infrastructure of Business blog makes a similar point, reminding us that the SEC's anti-shareholder stance comes despite 34,000 letters from investors pleading for power to nominate board members. "A big step backwards for property rights, hopefully this decision won't withstand legal challenge."

This issue is not going away with Associated Press reporting that within minutes of the decision, it was being challenged by the government employees' union. And if the companies continue to resist, they will sue, reports Reuters.

With the market in turmoil over subprime and credit woes, you can bet that shareholders are not about to roll over on the risk exposures of the companies that they own.