(FORTUNE Magazine) – The largest conflict of interest in America's financial system may finally be about to reveal itself.

It's the conflict inherent in the fact that money managers, which run trillions of dollars in mutual funds, pension funds, and endowment funds, must vote the shares they hold--shares that may be in customers or potential customers of their firms. Example: You're the chief of a money-management firm that would love a chance to run a chunk of Walt Disney's $2.7 billion pension fund. You already hold Disney shares in some of the funds you manage. Now suppose you were asked to vote those shares, as Disney shareholders were asked to do in March, on whether CEO Michael Eisner should be booted off the company's board and effectively fired. Remember, there's no such thing as a secret ballot in shareholder voting; your firm's name is on the proxy card. So how would you have voted?

If you had believed, as holders of 45% of Disney's shares believed, that canning Eisner was the right thing to do, but you voted for him anyway in the interests of your firm, you would have betrayed the pensioners who were counting on you to manage their assets to the best of your ability. Of course, you also would have broken the law: Money managers are fiduciaries legally required to put their investors' interests ahead of their own.

If you think that kind of thing doesn't happen in the corporate world, let me know and I'll introduce you to the tooth fairy. Obviously it happens, but this potentially mammoth betrayal hasn't sparked outrage because the facts have not been available. Mutual funds have never been required to disclose how they vote, so while everyone suspected what was going on, nobody could prove a thing.

Two developments are about to change the world for mutual funds and perhaps other money managers. First, mutual funds must now report how they vote. This SEC requirement took effect Aug. 31 over the protests of the fund industry. Sorting through hundreds of filings will take time, but an initial look suggests it is rich material. For example, Smith Barney and Wells Fargo, giant institutions that might reasonably expect to win Disney as a customer, nonetheless withheld their votes from Eisner. So did the giant Fidelity fund company, which administers Disney's 401(k) plan. But Vanguard voted its mammoth holdings in Eisner's favor; it won't comment on that or any other vote. Close students of the Disney saga believe fund managers with actual or potential conflicts will be found to have supported Eisner and may even have provided the margin of victory (the SEC was still processing filings as we went to press).

The second development is a report from the Government Accountability Office on how pension plans vote the shares they hold. It's scheduled for release Sept. 9 and will most likely call for a law requiring pension plan managers to disclose the same information now being newly demanded from mutual funds. Exhibit A will be the notorious case of Deutsche Asset Management and the merger of Hewlett-Packard and Compaq. Deutsche at the last minute switched its vote from opposing the merger to supporting it--after HP paid the firm $1 million for "market intelligence" and promised another $1 million if the merger went through. Those ugly facts might never have come to light except for a post-deal lawsuit and consequent SEC investigation, which makes you wonder how many similar cases we never hear about.

What's clear is that this is not about governance do-gooders trying to neaten the business world. In two highly significant cases, Disney and HP/Compaq, it's entirely possible that conflicted money managers determined the outcome. The Disney vote is too recent to judge, but the HP/Compaq outcome may have cost investors billions; the stock is below where it was the day the deal was announced and the day it closed, though tech stocks are up. Were all the fiduciaries holding those shares really putting investors' interests ahead of their own?

Robert A.G. Monks, one of America's most thoughtful and effective advocates of good governance, has been working on this disclosure issue for years. It goes to what investor capitalism is all about; as he says, "This is the root of it." In a nation where most shares are now held by institutions, the simple step of requiring them to disclose their votes could do more for America's broad class of shareholders than all the other reforms of the past three years.