Investor democracy kills unpopular Pru move

Tidjane Thiam must be wishing he ran a French company. Over there, a bold deal to create a leader in emerging markets might have attracted widespread national support.

Here, Prudential's chief executive has been faced with a curmudgeonly City audience, fretting about risk, griping about the price and threatening to block the deal unless it was renegotiated.

Such griping, though, is surely what shareholders are supposed to do. It would have been all too easy to get carried away with the Asian growth story that lay behind the proposed acquisition of AIA.

In the past, shareholders have frequently taken the management's view at face value and voted deals through, often with disastrous consequences.

Witness, for example, the implosion of Royal Bank of Scotland after the ABN Amro deal, which was backed by RBS shareholders.

This time round, shareholders have taken a more proactive stance, demanding that the Pru think again.

And the main players haven't been the hedge funds that were suspected of involvement in the Kraft-Cadbury deal. Instead, traditional institutions have been taking the lead, with the likes of F&C Asset Management making their doubts public.

The result is that a deal that shareholders disliked so much is mortally wounded - shareholder democracy in action.

The question now is whether this enthusiasm for active investment will stretch into less glamorous corporate events. If not, the Financial Reporting Council is waiting in the wings with a new stewardship code for shareholders, due out this summer.

oliver.ralph@ft.com