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Here's some bad news for U.S. executives frustrated by American shareholder activists: The Europeans are invading, with plans to stir up more trouble.

Big European institutional investors with sizable U.S. portfolios are pursuing quiet diplomacy, lobbying regulators and breaking with home-country tradition by filing shareholder lawsuits. They're also backing efforts to give shareholders a voice in executive-pay decisions, akin to practices in the United Kingdom and Australia.

"Collaboration is key," says Daniel Summerfield, a senior adviser at Universities Superannuation Scheme Ltd., Britain's second-biggest pension fund. As fund managers spread their investments around the globe, he says, they should "throw away their passports" and take on corporate-governance issues in the countries wherever they invest.

Wal-Mart Stores Inc. is one of the biggest U.S. companies to feel the foreign heat. Five European institutions were among seven big investors who faulted Wal-Mart directors last month for not appointing a special committee to investigate possible weaknesses in legal and regulatory controls. A core group of four U.S. and British funds first sought creation of the panel in May 2005.

Two Wal-Mart directors met with the disgruntled shareholders last September, agreed to look into their concerns and promised further dialogue. Management soon bolstered internal oversight by naming a U.S. chief compliance officer. But the board hasn't formed the investigative committee. "We do not feel we have received a meaningful response," the seven investors wrote in last month's letter.

A Wal-Mart spokesman declines to comment on the discussions, except to say that "a multinational coalition is somewhat unusual."

Elsewhere, Hermes Pensions Management Ltd., owned by the biggest British pension fund, is a lead plaintiff in a U.S. class-action suit involving the accounting scandal at Italian dairy giant Parmalat SpA. In April News Corp. agreed to give shareholders a nonbinding vote on its poison-pill takeover-defense plan, settling a Delaware lawsuit by about a dozen pension funds in Australia, the U.S., Britain and the Netherlands.

Such a lawsuit would be unusual in Britain. "It's not how we do things," says Dr. Summerfield of the universities fund, which joined the News Corp. case. "But we see litigation as part of our U.S. armory."

Corporate-governance experts say the trend carries an important message for U.S. executives and directors: "You have to pay attention to all shareholders, regardless of where they are located," says Charles Elson, a member of three U.S. corporate boards and head of the Weinberg Center for Corporate Governance at the University of Delaware's business school.

Mr. Elson predicts that the growing activism of British shareholders will help common U.K. practices, such as separating the chairman and CEO roles and giving shareholders an advisory vote on executive pay, take root in the U.S.

Some U.S. companies heed the message. Since 2002, officials of Exxon Mobil Corp. have met regularly in London with British investors about governance topics, including whether to separate the positions of chairman and CEO, an Exxon Mobil spokesman says.

Activist U.S. investors such as the California Public Employees' Retirement System pioneered cross-border activism in Europe during the 1990s, preaching the importance of corporate governance. They weren't always greeted warmly. William Crist, then Calpers chairman and president, found himself dubbed "Darth Vader" in a French newspaper. A U.K. concern branded him and Calpers a "bruiser" -- British for bully. Calpers later shifted tactics, forging alliances with institutional investors in other countries.

Several foreign investors have adopted a similar strategy in the U.S. In 2002, F&C Asset Management PLC, a British fund-management firm, joined with Boston-based Walden Asset Management to co-sponsor a shareholder resolution seeking greater board independence at EMC Corp. The Hopkinton, Mass., data-storage company initially resisted. But when the measure won about 56% of votes cast, EMC "turned very cooperative," remembers Karina Litvack, F&C's head of governance and socially responsible investment.

Susan Permut, EMC's deputy general counsel, says the company had pledged to make the board more independent long before the resolution passed. Among other things, the board soon recruited four more outside directors and established a nominating committee.

EMC directors and executives now hold face-to-face governance discussions twice a year with F&C, Walden and a second U.S. institutional investor. Irrespective of nationality, "they act as a barometer for us" on shareholder concerns, Ms. Permut says. One result: EMC's board last October adopted a policy requiring directors to offer their resignation if they fail to win majority support during an uncontested election.

Several British investors, including F&C and Railpen Investments, part of another major British pension system, helped the American Federation of State, County and Municipal Employees union attract significant support this spring for resolutions favoring an advisory shareholder vote on executive compensation.

In Britain, a 2002 regulation requires an annual shareholder vote on compensation for top executives. The results are nonbinding, but the rule is credited with tempering executive pay; British CEOs make slightly more than half of their U.S. counterparts.

The AFSCME proposal received an unusually strong 36% to 41% of votes cast at Merrill Lynch & Co., U.S. Bancorp and Home Depot Inc. It comes up for a vote Wednesday at Countrywide Financial Corp. To stress the trans-Atlantic ties, AFSCME official Scott Adams plans to address Countrywide's annual meeting wearing a jersey of the English national soccer team.

Other non-U.S. investors, such as the universities fund, are using letters and direct confrontation to lobby the Securities and Exchange Commission about imposing a similar rule. In March, Dr. Summerfield challenged SEC Chairman Christopher Cox at an investor conference in Washington. "How can [shareholders] express their views on executive compensation if there are no advisory votes on executive compensation?" he asked.

Exploring advisory votes might be a "useful inquiry" for the SEC, Mr. Cox replied, according to an SEC spokesman.

Global job hopping by governance activists are spurring the trend. Mark Anson, an American who had been chief investment officer at Calpers, has intensified Hermes's U.S. focus since becoming its chief executive last January. Veteran U.S. activist Bob Monks chairs Governance for Owners, a U.K. start-up that in the U.S. represents Railpen, whose U.S. holdings represent about 20% of its nearly $20 billion equity portfolio.

Governance for Owners recently asked 10 of Railpen's U.S. holdings to appoint a lead independent director, a move intended to improve oversight of management. Three immediately complied, reports Peter Clapman, head of its U.S. unit and a retired senior executive of TIAA-CREF, a major U.S. family of retirement funds. He deliberately didn't mention Railpen in his letters because he feared that U.S. companies would view it as "a U.K. pension fund that nobody ever heard of."

The cross-border activism seems likely to persist. "The governance agenda follows the money," observes Anne Simpson, executive director of the International Corporate Governance Network in London, whose 429 members manage $10 trillion in assets world-wide.

Moreover, British investors tend to take a longer view than Americans about the pace of corporate change. "We're not going to get instant results," says Ms. Litvack, of F&C Asset Management. "It takes four or five years before a behemoth...shifts a few degrees."