This is shareholder democracy in action

The business implications

Until a few months ago no one had heard of Tweedy, Browne. The small New York fund manager was on the radar of a few City cognoscenti, largely because of its media investments. But now anyone who sees the rather quaint name on their shareholder register will take notice. Tweedy has been instrumental in the dismissal of two of the newspaper industry's largest characters, Lord Black of Crossharbour and Piers Morgan. It is understood to be one of those shareholders who told Trinity Mirror that it expected it to take "appropriate action" if the abuse pictures were false.

Morgan has now joined Black, his friend Michael Green, the former Bass boss Sir Ian Prosser, the outgoing Marks & Spencer chairman Luc Vandevelde, the WPP chief Sir Martin Sorrell, GlaxoSmithKline's head JP Garnier, Disney chief executive Michael Einser and other captains of industry at the wrong end of shareholder power.

In the past couple of years the institutional investors who own the firms these people run have voted with their feet. Directors have been told in no uncertain terms that they are merely managers, and that it is the investors who pull the strings.

In a sense this is not a new phenomenon. Fund managers have always been able to hire and fire directors - but they have tended to do it in subtle ways: a quiet word here, a G&T with the non-executives there. If they did not like things they sold out. Severe irritation could lead to a takeover bid.

But things have changed. The new breed of activist shareholder is typified by the giant US firm CALPers and the UK's Hermes. They are in for the long term, and if they don't like something, they make sure the company knows about it.

There is also a new emphasis on corporate social responsibility, or CSR, driven by investors who want to put their money where they know it is not being invested in "bad" things such as arms dealing or GM food. As local authorities and trade unions have realised they can use pension funds as a social tool, CSR has become a major movement. Investors want to know that a company is acting in a way that will not harm its "reputation". That it why it was noticeable that one of the shareholders most publicly pressing for Morgan's departure was Isis, a leader in CSR.

Companies are so worried they called a summit with investors earlier this year to get a truce on this battle for control of British business. But it failed. And why? Because this is democracy in action.