After all the corporate scandals we've seen in the past few years, investors have been clamoring for reforms in the way that companies do business and account for their business. We want more transparency, more accountability, and fewer conflicts of interest, for starters.

Regulators have passed new rules, but to many, they're not strong enough. If you're wondering what you, as a small investor, can do, the answer may be... not much. A number of big thinkers see the solution in large investors.

In CFA Magazine (.pdf document) earlier this year, for example, Berkshire Hathaway (NYSE:BRK.A) CEO Warren Buffett, said, "The only real way to get improvement in corporate governance is to have big investors demand it. A relatively small number of large institutional investors who decided they would withhold their votes when they saw excessive compensation or poor performance, I think, could have real impact on corporate governance, but I don't think legislation will... You have to have owners who are true owners, and they have to behave like owners."

The situation isn't quite as grim as it may seem, however. Some institutional investors are flexing their muscles. Witness the California Public Employees Retirement System (CalPERS), the largest American pension plan. A recent Reuters report notes that CalPERS is concerned about companies continuing to give outside auditing firms not only their auditing business, but other business as well. This, of course, creates a conflict of interest. If an auditor is expecting to earn big bucks by offering consulting advice to a company, it will be more inclined to not rock the boat when it comes to that company's accounting, lest it tick off the company and lose business.

CalPERS, which is invested in more than 1,500 companies and manages nearly $140 billion, has long been an active watchdog. In the past year, it wrote to each of its holdings urging more separation of auditing and other services, and is now considering continuing its campaign. At its website, you can learn about its proxy votes for holdings such as Tenet Healthcare (NYSE:THC), Procter & Gamble (NYSE:PG), Paychex (NASDAQ:PAYX), and Oracle (NASDAQ:ORCL).

Your friend the Fool has also long been a corporate watchdog concerned about auditors -- read about the changes we'd like to see in our Motley Fool Manifesto.

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