It’s all about power. And, as Compliance Week readers know, power is about to shift noticeably away from corporate boards and management toward shareowners, particularly institutional investors.

There’s only one problem: Remarkably few of those institutions are equipped today to exercise power effectively.

Our belief, and that of numerous policy makers, is that empowering owners can help burnish responsible and accountable capitalism. Hence the spate of revolutionary reforms that have already been enacted or soon will be. From “say-on-pay” advisory votes on executive compensation (already required for companies taking government bailout money, proposed for all others), to being able to nominate directors directly on corporate proxies (the proposed “proxy access” rules), to having more power than ever in corporate director elections (the abolition of broker-cast votes for directors combined with majority voting), to knowing more about directors than ever before (more proposed disclosure regulations from the Securities and Exchange Commission), shareowners soon will have won authority we have sought for a quarter of a century.

So why aren’t investors universally jumping for joy? Perhaps it’s because we’re taking a hard look at what will be required in this brave new world, and a harder look at how we all performed in the recent past.

At the July gathering of the International Corporate Governance Network, 81 percent of the delegates—mostly investors themselves, with some $10 trillion in assets under management—said they thought investors helped cause the global financial crisis by being unprepared to monitor risk at the portfolio companies they own. Others have said that some investors’ short-term thinking and greed for better returns encouraged the boom in structured fixed-income products. Indeed, a prestigious trio—the Yale School of Management’s Millstein Center for Corporate Governance and Performance, the Elfenworks Center for the Study of Fiduciary Capitalism at St. Mary’s College of California, and the United Nation’s Principles for Responsible Investment—are sponsoring an invitation-only academic conference in October specifically to probe the role of institutional investors in the global financial crisis.

With shareowners starting to come to grips with our own failings, it’s understandable that leaders in the investing community see the powers moving in their direction and react in something of a manic-depressive manner. We alternate between saying hallelujah for the perceived coming era of fairness one moment, and quivering in fear at being unprepared the next.

The biggest fear is one of resources. Start with say on pay. We will have to consider how to vote on hundreds of compensation reports under current rules, and more than 10,000 if proposed federal legislation is adopted. Now layer on the probable need to vote at some increased number of contested elections. Then, add in the proposed improved disclosures about corporate directors’ skills and backgrounds, which will give investors more to think about as they vote for or against individual directors. Clearly, exercising the ownership franchise will require more attention and expertise than before—lots more. Few investors, save perhaps a handful of the biggest funds, have the in-house muscle needed to evaluate all those issues competently.

The likely result is an increase in the sway of proxy advisory firms such as RiskMetrics, Glass Lewis, and Proxy Governance. By providing the expertise and doing the analysis, they have become intellectual utilities for institutional investors. But the change isn’t an unqualified win for them either: It’s unclear if investors will pay to staff the new needs. And no matter how useful the services are, investors (as well as companies) will resent the increased power of the proxy voting services.

Maybe the changes will encourage competition. An ambitious compensation consultant could start a new service focused just on compensation disclosure and voting issues. Or perhaps the new needs will popularize high-level engagement services such as Governance for Owners, Hermes EOS, and F&C. These British firms direct engagement with companies on behalf of multiple investors in the global marketplace, although they have gotten less traction among U.S. investors to date. Whatever the form, it seems clear that some type of collective utility will be getting more business as a result of the changes.

Moving beyond the resource issue, institutional investors fear two potential misuses of newfound power. The first is the same that some in the corporate community have: that some investors will misinterpret the new regulations as license to micromanage or to press narrow agendas. Under that scenario, various investors might propose directors for relatively narrow reasons, while others might threaten “no” votes on compensation reports or directors to gain leverage for companies to consider their individual issues. We’re confident that the overall investment community will vote against such limited-interest campaigns. Still, such fights could give ammunition to those who continue to argue that owners of companies should be seen but not heard.

The second worry is the opposite. In this scenario, the resource burden will result in funds voting robotically on say-on-pay and in director elections. Here is the SEC testimony of Edward Durkin, director of corporate affairs for the United Brotherhood of Carpenters, whose pension funds own shares in more than 3,600 companies: “Casting a pay vote at thousands of portfolio companies will have to be based on a simple checklist of plan features, given the time constraints and resource limitations facing the funds.”

Neither extreme is the desired result, of course. Investors fought for these rights for a quarter of a century—from greenmailers in the 1980s through the Enron-Worldcom era to the global financial crisis of today—to create accountability where boards or managements are not doing their job. We were not just hunting for a different point of failure.

What is needed to make the new era of shareowner responsibility work? Above all, investors must understand that what’s being called for is something different than trading ability. Call it ownership ability.

We are being asked to be responsible overseers of our assets. Perhaps it’s time to add an “ownership discipline” to our “buy,” and “sell” disciplines. What would that include? Everything from how we evaluate management and the board to the time horizon for trades to how we vote proxies to how we lend stock for borrowing to how portfolio managers and analysts integrate governance into buy or sell decisions.

Should all these powers revert to investors (after the inevitable regulatory and legal challenges), we have no doubt that the near future will have a “two steps forward, one step back” feel as we adjust to the new regulatory landscape. Investors will both over- and under-reach. Companies will communicate unevenly. Intermediaries, such as proxy voting firms, will alternate between arrogance and shock. Still, these reforms are our best chance to put ownership back into capitalism.

To do that, investors need to become share owners, not share holders. Think that’s a ridiculous idea? We’ll remind you that we were investment trustees for over $100 billion in assets ourselves; we worked for hedge funds; we still serve on investment committees. Rest assured, we know the lure of the markets and trading screens. But it’s time for all investors to take an honest look in the mirror: Despite how good we think we are at trading, most of us were not able to trade around the market crash.

With the benefit of experience, we know that’s always the story: Few investors consistently can trade out of the way of trouble. Maybe it’s time we admit that. Then we’ll be ready to exercise those new powers responsibly to try to help prevent trouble, rather than believing we can all be traders who can outrun it. With great power comes great responsibility, and it’s time for investors to prepare for it.

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