This week, Abrams, who is now CFO of Opsware ( OPSW), and current Mercury board members Igal Kohavi, Yair Shamir and Giora Yaron, received Wells notices from the Securities and Exchange Commission. Opsware is not a target of the SEC investigation and Abrams remains in her position, although a finding by the SEC could mean that she could no longer serve as an officer or director of a public company. Executive misconduct is bad enough, but you have to wonder what the board, which is legally required to act as a watchdog, was doing for all those years. Gary Lutin, an investment banker who runs an online forum for shareholders of another trouble company -- CA ( NYSE) -- puts it this way. "Whether they were simply out to lunch or somehow benefiting isn't known, but they were clearly not doing their job as the overseer of investors' interests," Lutin says But there's a larger point here as well, says Lutin. "This and the CA case raise the issue of whether there really is a practical process by which the well-intentioned good citizen can actually do what is expected of them." By "good citizen," Lutin means Mercury's major institutional shareholders -- in this case, Wellington Management, S.A.C. Capital Advisors, and J& W Seligman, all companies with good records on governance issues. But so far as I can tell, none have filed a 13D with the SEC that would provide notice that they intend to be more than a passive holder. Lutin points out, however, that the SEC doesn't seem so interested in allowing shareholders to replace errant directors. In fact, the Amalgamated Bank's LongView Collective Investment fund submitted a proposal to replace CA directors Alfonse D'Amato, the former Republican senator from New York, and Lewis S. Ranieri, former vice chairman of Salomon Brothers. Longview spokesman and counsel Cornish Hitchcock says both men were on board when misconduct took place and should be removed. CA's position is that they weren't. But what's important here is the process, not the particulars of their performance on the board. The SEC has ruled that CA can exclude the proposal from its proxy. And that means shareholders won't be able to vote them out. The best they can do is withhold their votes. LongView has appealed the ruling. If LongView loses, it appears that a very nasty precedent will have been set. Mercury's current management says it has "scrubbed" the company from top to bottom, spending $70 million in the process. Fair enough. And there's no indication that the current officers had anything to do with the misconduct of their predecessors. But Mercury has been seriously damaged, so damaged, in fact, that some analysts believe the only way to go is a sale. Katherine Egbert, the well-regarded analyst at Jefferies, says, "We think it highly likely that Mercury will be acquired before it is re-listed. And given the current timeline, it doesn't look like relisting will happen before 2007, she says in a note published Thursday. Jefferies does not have an investment banking relationship with Mercury. She certainly could be right, and the obvious suspects would be Hewlett-Packard ( HPQ) and CA. But that's another matter. Nobody on Wall Street would argue that a rank-and-file worker who refused to do his or her job shouldn't be fired. Shouldn't the same standard apply to well-compensated directors who do little more than warm a chair? The SEC needs to be reminded that shareholders, not management, not the board, own the company. Their rights must be respected.