U.S. big businesses are being pushed by lawmakers and regulators to expand shareholder democracy in the wake of the financial crisis -- with executive pay and board of director elections the main areas where changes soon could be on the way.

Attendees at the Reuters Global Financial Regulation Summit in Washington this week said corporate governance reform efforts are gaining traction as angry investors respond to financial industry bailouts, sunken stock portfolios and widespread job losses.

Not everyone thinks proposed changes are a good move. While some say bailed-out companies should be subject to pay caps and other oversight, they do not want a raft of new restrictions expanded to other companies.

If you're a profit-making organization, we shouldn't have anything to do with the management of it, U.S. Sen. Charles Grassley, the ranking Republican on the Senate Finance Committee, told the Reuters summit.

Investors showed their anger on Wednesday with one of the most well-known recipients of taxpayer money -- Bank of America Corp, which needed a $20 billion bailout to absorb its acquisition of troubled Merrill Lynch & Co.

Bank of America shareholders voted to strip Chief Executive Kenneth Lewis of power by replacing him as chairman of the board in a sign of their discontent. Such moves are rare in Corporate America, and often are precursors of an executive's eventual ouster from the company.

With shareholders demanding more accountability from big companies, the U.S. Securities and Exchange Commission is expected to revisit a proposal to make it easier for investors to nominate directors to corporate boards.

Business groups do not like the idea, saying it could lead to fringe interests obtaining board seats. But new SEC Chairman Mary Schapiro told the Reuters summit that she is convinced that expanding so-called proxy access makes sense and expects the commission to circulate a proposal as soon as next month.

The time has come for us to join many other countries in creating a reasonable right of access to the proxy, she said.

Shareholders currently can only propose directors through proxy fights, a system that activist investors complain is expensive and onerous.

Both Schapiro and SEC Commissioner Luis Aguilar, also interviewed by Reuters this week, said they think whatever the agency proposes may result in legal challenges from opponents. But they said they do not fear a court fight.

If we are doing the right thing for investors, I'm not worried about being sued, said Aguilar, who along with Schapiro is one of five SEC commissioners who make decisions on federal securities regulations.

Some governance changes could come through new laws, including a proposal to force U.S. public companies to give shareholders a greater voice on executive compensation through annual advisory votes on corporate leaders' pay packages.

U.S. Rep. Barney Frank, chairman of the House Financial Services Committee, told the Reuters summit that he wants the so-called say on pay measure to be part of a business reform bill presented for President Barack Obama's signature before we adjourn for the year.

Activist investors also are pushing for a separation of the chairman and CEO roles at more companies -- a move they contend would lead to more boardroom independence.

The idea is not universally endorsed. Many business experts say companies are best run with one strong leader at the top rather than dividing the top jobs among different people.

The idea of splitting the roles has merit, but one size does not always fit all, the SEC's Aguilar told Reuters.

Schapiro said the agency may consider requiring companies to better explain their approach in this area so that shareholders can understand the rationale behind the company's practice of combining or splitting the chairman and CEO roles.

While summit attendees said governance activists have momentum in the wake of the financial crisis, some fear that regulators and lawmakers will go too far, particularly in trying to control executive payouts at a time of much populist anger against big business.

I've never been a strong advocate that the government should get involved in setting salaries or bonus or things, said Democratic U.S. Rep. Paul Kanjorski, chairman of the House Financial Services Subcommittee on Capital Markets. That's what we have structural organizations known as corporations for.

(Reporting by Martha Graybow; Editing by Richard Chang)