If you're not outraged, you haven't been paying attention -- or maybe you've been brainwashed into thinking "pro-big business" equals "pro-market." To me, recent congressional attempts to gut shareholder-friendly corporate governance provisions in the financial reform bill suggest that some members of our economy think they should be more "free" than others. Guess which side you and I fall on?

Last minute sellout?
Last week, Senate negotiations regarding the final financial reform bill appeared to remove some of its corporate governance provisions, including a mandate for majority voting.

Even more ominous is the attempt to block "proxy access," a move apparently being pushed by Senate Banking Chairman Christopher Dodd at the White House's request, as it tries to assuage the Business Roundtable's concerns. The new plan would add a provision requiring that investors own a whopping 5% stake in a public company for two years, before they can gain the right to nominate their own candidates to the board of directors.

The California Public Employees' Retirement System (CalPERS), which has fought against shoddy corporate governance policies at many companies, recently expressed its shock at these developments to the White House. CalPERS noted that no single shareholder owns 5% of such major companies as Bank of America (NYSE: BAC), IBM (NYSE: IBM), and ExxonMobil (NYSE: XOM). Even the 10 largest pension funds by assets don't hold more than 3%.

Clearly, this restriction would limit the amount of change institutional or activist investors could push for in corporate America. That's a huge deal, because institutional investors need to take a more aggressive role in pro-shareholder affairs. If anything, the mutual fund industry has been asleep at the wheel. Governance experts have even accused some funds, like AllianceBernstein LP (NYSE: AB), Blackrock's (NYSE: BLK) Barclays Global Investors, and Ameriprise Financial (NYSE: AMP), of being "pay enablers," rubber-stamping overly generous compensation and other bad behavior they ought to condemn.

And if you're afraid that "activist investors" with an agenda and an axe to grind might somehow have their wicked way with public companies, get real. No one's forcing any shareholder to vote for even the noisiest rabble-rouser's proposals, unless they believe those initiatives are in their own best interests. (That said, I'd argue all shareholders should make it their business to listen to other stakeholders' concerns, at least.)

Freedom for whom?
Too often, lawmakers who claim to defend "free market principles" are actually rigging the playing field for certain interests, at the expense of the rest of us. Look no further than the oil industry, and specifically BP's (NYSE: BP) recent and agonizingly ongoing tragic disaster. When the government intervenes on big business's behalf, imposing liability caps and handing out subsidies, it's not making the market any more free. It's just paving the way for disasters like the Deepwater Horizon and the well from hell.

Such distortions "free up" companies to take on too much risk. In a true free market, these companies would have to acknowledge worst-case scenarios, and prepare for the possibility of bankruptcy if they're inadequately prepared. I, for one, am sick of watching companies burn down the house, without ever getting any say about whether they should have been playing with matches in the first place.

Last week, my colleagues Dayana Yochim and Ilan Moscovitz beseeched individual investors to petition Washington not to kill shareholder rights. True, companies deserve the freedom to conduct their business without undue restrictions. But as part owners of public companies, shareholders should also have the liberty to voice their concerns without having to resort to selling their shares.

Shareholders and their rights are an essential part of a vibrant marketplace. Let's hope Washington stops rigging the game against us.

Check back at Fool.com every Wednesday and Friday for Alyce Lomax's columns on corporate governance.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy. Try any of our Foolish newsletters today, free for 30 days.