Proxy battles are one of shareholder activists' most powerful tools. If one of these boardroom brawls brews up at a company you own, take the opportunity to think long and hard about whether management's been serving your best interests.

Smoke on the horizon
The recent battle between Barnes & Noble management and billionaire investor Ron Burkle grabbed many news headlines, but not all proxy fights gain the same kind of high profile.

Among the plethora of proxy skirmishes on the horizon:

  • Seneca Capital is trying to nominate two directors at Dynegy (NYSE: DYN), where it's adamantly opposed to a possible takeover by Blackstone Group (NYSE: BX). Carl Icahn is joining in, stating that he's voting "no" on the takeover and offering Dynegy a $2 billion line of credit.
  • Icahn's a busy guy. In June, he was saber-rattling for a proxy fight with Lions Gate (NYSE: LGF), where he has been trying to take over the company. At the company's Dec. 14 annual meeting, management will discuss the latest offer.
  • Airgas (NYSE: ARG) has been the target of a hostile takeover attempt by Air Products & Chemicals (NYSE: APD). Last month, Airgas investors went ahead and replaced one-third of the company's directors with Air Products' nominees.
  • Sterling Bancshares' (Nasdaq: SBIB) largest stockholder recently gave the thumbs-down on management, announcing that it will nominate five candidates to the company's board at the next annual meeting.

Granted, such activist agitations may not always be the right path. Bill Ackman tried to exert pressure on McDonald's (NYSE: MCD) management back in 2005, but even after rejecting Ackman's demands, McDonald's management has done just fine in the years since. However, you could also argue that Ackman's agitation raised management's awareness that somebody was really paying attention, and spurred executives to perform better.

Declaring (proxy) war
Given the recent controversy over proxy access, it's important to remember that there are downsides to proxy battles, including their ability to distract management. In 2008, Wharton experts admitted that proxy battles may not be productive, even if they bring to mind the kind of ringside smackdown that makes good pay-per-view TV.

On the other hand, if the battle hinges on management's incompetence or indifference to shareholder concerns, perhaps those managers deserve to have something to fret about. If nothing else, proxy wars remind managers that shareholders exist, and that managers must be accountable to them.

Proxy battles can truly raise awareness of cases in which management has failed to do right by shareholders -- where it's dropped the ball, ignored shareholder value, or quite literally run the business into the ground. Shareholders should take these fights seriously despite the outcome.

Fight for your shareholder rights
Obviously, proxy access opponents would rather avoid the distraction (and the pain-in-the-posterior scrutiny) that proxy wars represent. However, proxy wars are a vital shareholder right. They keep managers and boards honest, and help to ensure that they work hard for shareholders, rather than themselves alone.

Let's hope our companies can steer clear of the kind of dysfunction that can end up warranting proxy wars -- and be grateful for the option to use shareholder votes to change things for the better when they do.

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

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Alyce Lomax does not own shares of any of the companies mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy is, in fact, a beautiful and unique snowflake.