Not surprisingly, the next proxy season threatens to be more tumultuous than usual–but not entirely for the reason one might assume. While the subprime credit crunch dominates headlines, it is unlikely to be the cause c?(C)l??bre in 2008 proxy votes–except at high-profile losers in financial services and homebuilding. The exclusion of the topic from proxies is mostly thanks to the Securities and Exchange Commission's no-action process, which allows companies to bar issues outside the company's ordinary areas of business. As a result, a slew of corporations outside of mortgage lending have nixed proposals related to subprime-related exposures and investing practices. "As bizarre as it sounds, the issue that is top of mind for investors right now won't be on many ballots," says Patrick McGurn, special counsel to the ISS governance unit of RiskMetrics Group in New York. "Next year may be a different matter."

Even so, the subprime crisis will be in the room, so to speak, at annual meetings in the tenor of fed-up investors unlikely to be as willing as usual to wait for reform or follow management's recommendations on proxy votes. Leading the charge, in many cases, will still be activist hedge funds, despite the pummeling a few high profile firms have taken.

Although experts had predicted that tightened access to credit would cause activism to wane, "The lion's share of proxy contests are being driven by activists trying to get board seats," says ISS's McGurn. Already this year, there have been more than half a dozen instances where boards have settled privately, agreeing to give a seat to dissident shareholders.