It’s not exactly Agincourt, but the success of institutional shareholders in forcing the Rio Tinto board into a strategic U-turn is quite a victory. For once, disgruntled investors have managed to press a major public company into a volte-face. The mining group’s board has jettisoned a deal with the Chinese and is instead giving its existing shareholders first dibs on a capital-raising.

Winning the privilege to cough up $15 billion (£9 billion) might seem a strange kind of triumph, but triumph it is. Usually, shareholder revolts go no further than forcing the occasional chief executive to walk the plank. Or voting down the remuneration report — a hollow victory as the vote is not even binding. Or squeezing out a small tactical concession, as furious Barclays shareholders managed last autumn when they were snubbed in favour of Gulf investors.

This time pre-emption rights have been fully honoured. This is not the St Crispin’s Day of Agincourt fame, but the happy band of institutions that lobbied for change should be proud of their part in the battle, and those who did not fight should perhaps hold their manhoods a little cheap that they were not there to prod Jan du Plessis, the Rio chairman, into this sensible new course.

Such coups on strategy are unusual. Companies pay their brokers well to ensure they are attuned to investor mood music and able to anticipate revolts before they gather pace. Large investors are sounded out in advance about strategic shifts, and if the reaction is chilly, the plans are quietly dropped. The last successful revolt on this scale was probably that over the merger of the London Stock Exchange and Deutsche Börse.

Of course, it helped that financial markets have improved in the months since the Chinalco deal was first mooted. Suddenly a Plan B for Rio became much more realistic. But Mr du Plessis is big enough to admit that shareholder feedback played a part in his strategic reverse.

It is perhaps no coincidence that the Institutional Shareholders’ Committee — the alliance of pension funds, insurers and fund managers — chose yesterday to publish its proposals on more effective engagement with boards. The normal allegations of inertia, inaction and timidity could not be levelled at institutions on this their victory day.

The ISC is moving slowly in the right direction in its efforts to make boards more accountable. It says chairmen of key board sub-committees like audit and remuneration should come up for re-election every year, and that if they fail to win 75 per cent of the vote, then the chairman of the whole board should stand the following year. This is a start, but what is wrong with the simple formula of all directors being voted on every year, as has been adopted by a few blue chips, such as Vodafone?

The ISC is even more cautious on how investors should collectively apply pressure on recalcitrant boards. Steps should be taken, it says. Yes, but what steps? The ISC tells us it will consult more, which sounds a bit Sir Humphrey. But in truth any mechanism to encourage more collective action needs to come from practitioners, not trade association functionaries.

There doesn’t have to be any set of rules or special bureaucracy. All that is needed is for fund manager A to pick up the phone to B and C and together determine to show energy, grit and tenacity.

Shareholders aren’t always right, of course. As Mr du Plessis pointed out to me yesterday, it was institutions “preaching” to companies about the virtues of gearing up and share buybacks that led to so many companies going into this downturn with hopelessly inadequate balance sheets.

Investors are just as capable of falling victim to collective delusion as board directors or bankers. They do need to flex their muscles more than in the past, but when they do so, they also need to be right more often than they are wrong.

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