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Companies like BP have more power than ever before â€" but there is a democratic deficit at the core of their governance

The transatlantic diplomatic pugilism over BP is only part of a much bigger story. The crisis has laid bare how our dangerous dependency on oil has led companies into ever riskier forms of extraction; unless we wean ourselves off this addiction more disasters seem inevitable. Deepwater has also exposed another dangerous dependency in which we are all complicit: our blind reliance on Tony Hayward, Sir Fred Goodwin and other corporate titans to provide for our welfare in old age.

The environment is fragile, and so are our pensions. BP accounts for £1 in every £7 of British pension funds' dividend income, and 40% of its dividend payments go to US investors, including state pension funds for teachers and other public servants. Its innocent victims are not just fishermen in Louisiana, but grandmothers from Texas to Torbay. Big oil has supplanted big banking as the dominant element in pension portfolios. The flow of dividends from finance stalled in the credit crisis and if BP suspends its payment as expected the oil income will fall too.

As state provision is rolled back, our collective reliance on the stockmarket has increased. The problem is that most of us have little idea what Hayward, Goodwin et al are up to, and less control. It has taken the banking meltdown and now Deepwater for the people running the world's biggest companies to subjected to serious scrutiny, and the two crises have revealed a gaping vacuum of accountability at the top of the corporate tree.

The most powerful man on the planet, Barack Obama, has made it clear that he would like to eject Tony Hayward from the chief executive's suite at BP, but he has no power to do so. Many ordinary pension-fund members â€" the ultimate owners of the oil giant â€" no doubt feel the same, but they have no power either. The only people who do are the institutional investors who manage our savings on our behalf, and who are supposed to be earning us good returns. But these august operators, themselves very much part of the City establishment, make their decisions in the cloistered confines of their own offices. Rank-and-file pension savers might put up the money, but that doesn't give them a voice.

The average pension fund member is not an expert on finance, oil extraction or fund management. The system here, as in the US, relies on large shareholders to police boardroom behaviour and risk-taking. We now know how utterly they have failed in that duty. Most institutions are strangely timid about confrontations with company managements, despite the billions of pounds under their control. Take Tidjane Thiam, the chief executive of the Prudential. He remains defiantly in his job despite trying unsuccessfully to steamroller investors into backing an ill-advised takeover of the Asian insurer AIA.

A major part of the problem is that the City has a short-termist trading culture, rather than a long-term ownership-based one. Large investors often focus on bids and deals and the next quarter's earnings, rather than sustainable growth. That leads them to a position where they would, for instance, rather sell out Cadbury to a predator than support it and the wider interests of the UK economy. Even when there are shareholder protests, they are often brushed aside. Small investors do appear at annual meetings, but their often acute and well-informed comments are treated as a nuisance or at best as entertainment.

Companies like BP have more power than ever before. They operate across national boundaries and their finances dwarf those of many nation states, but there is a democratic deficit at the core of their governance. If we dislike politicians, we can vote them out. But if we dislike the way company managements lose billions of pounds of our money, we are impotent and disenfranchised.

This situation can and must change. The ownership of stockmarket-listed companies is fragmented between many institutions, with even the largest investors normally holding a small percentage of the total shares. Boards of directors, by contrast, are united in self-interest and well placed to fend off challenges to their actions.

Managements could be better held to account if investors were to band together. There are already some early signs of this happening: before Deepwater, large and small shareholders in BP backed a resolution at its annual meeting asking it to provide more information about the risks of its controversial plans to extract oil from tar sands. Ordinary members should be given clearer information and more of a say in what their fund is doing with their savings. This has started to happen in the Netherlands, where the PNO Media pension fund is trying to create a new model of socially responsible investment with more transparency for members.

The role of pension fund trustees â€" who are supposed to be the members' champion â€" also needs to be re-examined. They need better training, and they need to ask more questions about where savers' cash is going. In an age of social media, it should be possible to break down the barriers standing between owners and managers and to usher in a healthier, more transparent and more accountable system. It would be madness to continue giving executives carte blanche to pursue strategies that lay waste to our pensions and in the case of BP, to the planet.

Shareholder power is a sleeping giant. The Deepwater crisis might mark the moment it finally began to stir.