Welcome to the 2010s. You’re just in time for the move from Sarbanes-Oxley to shareowners.

In a moment, we’ll provide a forecast about what lies ahead for executives, boards, and investors this decade. But first, let’s wallow in hindsight to see how the 2000s—what Time magazine calls the “Decade from Hell”—shaped up for those responsible for companies and shareowners.

The ’00s opened with the market ascending rapidly thanks to what we now know was a dot-com bubble. Fueled by a mixture of optimism, true entrepreneurship, excess, and fraud, the telecommunication, media, and technology sectors were all flying high. Silicon Valley and Wall Street were bi-coastal pillars of a booming economy we considered a model for the rest of the world.

Then came the parade of scandals at Enron, Worldcom, Parmalat, Adelphia, Global Crossing, Tyco, and others. Of course, by definition fraud is hidden, although you don’t have to hide much when the world is so enamored that it ties a rose-colored-blindfold around its collective eyes. Some of Enron’s most audacious machinations, for example, were disclosed in corporate filings, albeit in nearly impenetrable footnote prose. Few investors or analysts, dazzled by the company’s ballooning stock price, were prepared to subject it to much scrutiny.

Despite all that excess in plain view, much was still hidden as well. In February 2000, The Corporate Library, normally a blunt critic of corporate governance flaws, anointed General Electric as the blue-chip company with the best CEO employment contract in America. Only later, thanks to a bitter divorce battle, did Jack Welch’s astonishing perks come to light.

To be sure, some voices did raise warning flags. Ten years ago this month, the now-defunct non-profit Investor Responsibility Research Center spotlighted risky governance practices chronic at Silicon Valley firms. Reporting on the findings, the Global Proxy Watch newsletter observed, “Many will be ill equipped to ride out a market meltdown.”

When the scandals did erupt, Washington’s reaction was fast and tough. The Sarbanes-Oxley Act shaped corporate governance in the 2000s—but not perhaps in the way you might think. Don’t just consider what the statute did, but what it did not do. Congress and regulators chose to ignore an obvious, market-based solution: empower shareowners to oversee their portfolio companies in the same way a neighborhood watch safeguards a community. Perhaps investors’ quiescence during the bubble made policymakers dubious of their abilities to act as stewards for their companies. Whatever the reason, Washington opted for crackdown: a stiff new compliance regime aimed at preventing fraud. It was big government brought in to police big business.

Companies paid boatloads to measure up to SOX; general counsels got new jobs to do; auditing firms got new oversight. By and large, it worked: Financial reporting is much improved. Moreover, so far, no Enron-style fraud has been found at the root of the current financial crisis.

But SOX did almost nothing to improve the accountability of boards to investors. No wonder, then, that corporations were caught in a pincer of pressures: costly new compliance burdens from Washington, and intensifying activism by frustrated investors.

Fast-forward 10 years. We have another crisis, which is being blamed at least in part on poor governance. So what’s in store for the 2010s?

A coincidence of timing and policy means that just as the new decade dawns, we are seeing the first genuine rebalancing of corporate power in generations. This time, Washington has opted for the neighborhood-watch solution rather than a shiny new rulebook. Shareowners seem poised to win unprecedented authority to shape corporate boards: forthcoming rules from the Securities and Exchange Commission on shareowner access to the proxy statement, an end to broker voting in director elections, the spread of majority voting in director elections, and new disclosure requirements for board nominees. Add a probable requirement to put corporate compensation policies to an annual shareowner vote, and the result is an historic shift empowering owners to oversee their companies.

But if big government has decided to enlist investors to guide the market, then our future depends on how much shareowners are prepared to act responsibly. So far the record is mixed. Short-term thinking abounds; the average holding period of U.S. mutual funds is now materially less than a year. That pressures companies to act quickly, to generate an immediate change in circumstance.

Moreover, some activists clearly helped fuel the financial crisis by demanding highly leveraged balance sheets, so companies could “return” capital to equity investors. Other owners have been oblivious: They either don’t vote their shares or blindly follow the recommendations of third-party proxy advisory firms rather than doing their own analyses. It’s the equity version of creditors who blindly follow the recommendations of credit rating agencies rather than doing their own risk analyses.

On the other hand, there are signs that institutional investors are coming to grips with the reality that capitalism needs enlightened, involved owners to thrive. At least for now that effort is being led by the usual suspects. The CalPERS and CalSTRS pension funds are engineering a collective clearinghouse of pro-shareowner board nominees that asset management funds could use if they invoke proxy access and seek to nominate dissident directors. The International Corporate Governance Network promulgates best governance practices for investors, not just companies. Yale School of Management’s Millstein Center is building a professional education program for investors on the discipline of stewardship. We expect other services and initiatives to arise to help funds exercise their say-on-pay votes and to counsel parties on entering sustained dialogue between boards and investors.

We don’t argue that shareowner rights, even if properly wielded, will prevent all crises. But they could lesson the risks and minimize the effects of crises.

That being said, if all these reforms still fail to rouse shareowners to mobilize a credible neighborhood watch over capital markets, policymakers will probably resort to rule changes affecting the definition of fiduciary duty. Britain is already heading in that direction to stimulate investor wakefulness. The much-anticipated report on corporate governance by Sir David Walker recommended codifying “stewardship principles” that would identify engagement with boards as a key component of responsible share ownership.

The bottom line is simple: The big governance story of the 2000s was big government itself; corporate boards had to grapple with and adapt to the sweeping anti-fraud policing of Sarbanes-Oxley. The big governance story of the 2010s will be whether shareowners grow into the rights about to be handed to them and exercise those rights wisely.

We don’t argue that shareowner rights, even if properly wielded, will prevent all crises. But they could lesson the risks and minimize the effects of crises. After all, by empowering owners, we actually are returning to an idea as old as Adam Smith’s “invisible hand” and as new as James Surowiecki’s “wisdom of crowds.” Empowering the providers of capital to monitor capitalism, rather than relying on government alone, promises a more robust, timely, and nuanced set of reactions to problems that develop.

So welcome to the ’10s. The goal—accountable capitalism—remains the same; but the instruments of change are very different. Savvy boards, CEOs and corporate officers will need to watch, anticipate, and adjust to such developments.

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