Just 10 days ahead of the most important shareholder vote of his life, Walt Disney Co. Chairman and Chief Executive Michael D. Eisner faced an ordeal that awaits many of his peers in the future. Along with three fellow Disney directors and his chief financial officer, he subjected himself to an hour of tough questioning in a Feb. 23 conference call with more than 200 institutional investors from pension and mutual funds that own some 30% of Disney stock.

Eisner didn't have control of the agenda, as he does during traditional earnings conference calls or annual meetings. This time the microphone was firmly in the hands of Gregory P. Taxin, a former investment banker who runs Glass, Lewis & Co., a small advisory firm that helps institutions decide how to vote in corporate elections. Taxin asked questions that big investors submitted, mostly by e-mail, before and during the call. And nobody was pulling any punches. Why was Eisner both chairman of the board and CEO, they wanted to know? Wasn't his 2002 pay of $1 million in cash and $5 million in stock too much? And on whose authority had he decided to spurn a takeover proposal from Comcast Corp. before even knowing how rich it could be? Within days, several big institutions announced they would withhold their votes to reelect Eisner to the board.

These calls are the latest challenge to CEO power. They're driven by rising shareholder concerns about corporate governance and new or pending regulations. The calls can quickly crystallize shareholder opinion, churn up market-moving information, and shift battles for corporate control. And they're giving dissidents the chance to hammer home their message directly to other shareholders, rather like a Presidential hopeful challenging an incumbent in a debate. "The world of corporate governance has become much more like the world of politics," says Patrick McGurn, senior counsel of Institutional Shareholder Services Inc., one of two firms that currently hosts such calls.

The conferences are designed for professionals. Glass Lewis invites only its clients and financial reporters, some of whom issued stories during the Eisner call. ISS, however, allows anyone who registers in advance to listen. Individual investors can read transcripts online from both services within 48 hours. Securities lawyers say that the calls are open enough to comply with Securities & Exchange Commission rules requiring the fair disclosure to a wide audience of market-moving information.

ISS and Glass Lewis held the first shareholder calls in February. They expect to stage a dozen more this year, depending on how many proxy battles develop. The call with Eisner was the fourth of its kind and the first in which a sitting CEO submitted to a grilling by sophisticated investors from around the world. Two weeks earlier, Eisner adversary Roy Disney and a business partner had gone on a Glass Lewis call with a view to forcing Eisner out of his job by campaigning for a no-confidence vote at Disney's Mar. 3 annual meeting.

SHARPER TEETH. In early February, dissident shareholders who were trying to stop executives of MONY Group Inc. from closing a deal to sell out to AXA Financial Inc. went on calls arranged by ISS and Glass Lewis. ISS alone attracted 231 institutions holding 28% of the stock. Executives, including Chairman and CEO Michael I. Roth, refused to participate in calls by either firm. They said in a statement they preferred "one-on-one investor meetings" and would be holding their own conference call the same week to discuss earnings and to "update shareholders about the transaction." All the same, later the deal was delayed -- and improved. MONY execs offered to surrender enough from the golden parachutes they will be entitled to in a sale to pay investors an extra 10 cents-a-share special dividend.

ISS and Glass Lewis had both planned conferences with Oracle Corp. executives before that company's bid for PeopleSoft Inc. was opposed by the Justice Dept. Forecasts Nell Minow, a corporate governance activist and editor with The Corporate Library LLC: "This is going to become an established institution."

Powerful forces are working in favor of that prediction coming true. Money managers are under pressure from regulators and clients to exercise their votes to ensure that companies are run for the benefit of their shareholders. Last year, the SEC adopted rules requiring money managers to spell out their policies for deciding how to vote and then keep track of those votes. This summer, mutual funds will have to begin disclosing publicly how they voted in the past year. Now the agency is raising the stakes further by moving toward giving direct no-confidence ballots -- such as those in the Disney contest -- more teeth. Under a proposed rule, if more than 35% of votes are withheld from incumbent directors, major shareholders could put their own nominees on company ballots the following year.

Institutions like the shareholder calls. Small ones that don't merit a personal call from a CEO get to submit their questions, while big ones like to ask hard questions anonymously through the moderators so they don't hurt their relationships with company management. The institutions also learn from one another's questions. Cynthia L. Richson, corporate governance officer at the $59 billion Ohio Public Employees Retirement System, says listening to the Eisner call helped her sharpen her questions for his visit to her offices three days later. "It helped me get what I really wanted to hear about, as opposed to his canned speech,"she says. Her fund voted to withhold its 4.7 million shares from Eisner's reelection.

Other experts doubt that the calls will shift the balance of corporate power much. They are as likely to expose the dissidents with flimsy arguments as they are to help the causes of the justified ones, argues John C. Wilcox, vice-chairman of Georgeson Shareholder Communications, the proxy solicitor representing Eisner and the Disney directors. Wilcox says that good corporate executives will soon master the form even though they don't control the microphones. He argues that Eisner and the Disney directors used their call to advantage by circumventing the news media to describe reforms that they have already made. Disney stock climbed 2% during the call.

Still, Eisner handed his opponents a cudgel by revealing that he had been tipped off to the Comcast bid ahead of time and had the board of directors' backing to reject it immediately. Comcast used the revelation to again criticize Eisner and Disney directors for not being open to ways to increase shareholder wealth. "Glass Lewis is now a must-listen-to," says Carl B. Schecter, head of risk arbitrage at Nomura Securities International Inc. "If these calls are going to be market-moving forums, that will give them more power."

The calls mark a major advance in the way big shareholders can talk among themselves and set their own agenda when dealing with executives. For most of the 20th century, says activist Minow, efforts to improve corporate governance were handicapped by "the inability of shareholders to communicate with each other." Then, in 1992, the SEC opened the door by relaxing restrictions originally designed to keep big stakeholders from secretly ganging up to take control of a company. The change encouraged some ad hoc meetings between investors who knew one another and wanted to complain about specific companies. But such meetings lacked the scale and financial backing that ISS and Glass Lewis bring. They pay upwards of $12,000 in telecom fees to link their subscribing clients around the globe; each participant costs them an average of about $1 a minute.

Indeed, the firms are stepping into roles that only big investment banks used to play by setting up meetings between their corporate banking clients and institutional investors. But the banks were working mostly for the companies and not for the investors. Says consultant Gary Lutin, an investment banker whose Lutin & Co. advises dissidents and Glass Lewis: "You're seeing a shift toward investor-controlled exchanges of information from management-controlled." In other words, the message here is the medium.