It isn't true that CalPERS is squabbling with every corporation in America. It just seems that way.

The California Public Employees' Retirement System is voting its shares against directors seeking re-election to the boards of some 2,700 companies as part of its crusade for better corporate governance. That represents 90 percent of the U.S. companies in which it owns shares.

CalPERS' strategy is focused mainly on companies that hire their auditing firms to do consulting work as well - a move that CalPERS believes is an obvious conflict of interest. So far, none of the directors have been removed, but two companies targeted by CalPERS have pledged to halt the practice: semiconductor equipment maker Applied Materials Inc. and American Express Co., both of which asked CalPERS to change its vote. CalPERS agreed.

But despite its $166 billion investment portfolio and reputation for moving mountains on Wall Street, some analysts believe CalPERS may be hurting itself by going after so many companies.

"I'm concerned they're overextending themselves," said Ralph Ward, publisher of a newsletter called Boardroom Insider. "It seems like they're trying to do too much at once and diluting the effect."

Nevertheless, CalPERS officials say the fight is a worthy one, regardless of how many companies capitulate.

"It's an effective way to advance the cause of reform," said board member and state Treasurer Phil Angelides. "This is a way in which CalPERS is able to shape public opinion and remind everyone in the marketplace that the job of reform is not done."

In its campaign, CalPERS has targeted some of the nation's most famous corporate executives and directors. It voted against re-electing Warren Buffett and Peter Ueberroth to the board of Coca-Cola Co. It voted against Steve Jobs and Al Gore at Apple Computer Inc. Slates of directors have been targeted at Honeywell Inc., Merrill Lynch & Co. and elsewhere.

CalPERS' shareholder activism has coincided with Angelides' arrival on its board when he became treasurer in 1999. Angelides, a Democrat who is likely to run for governor in 2006, has pushed CalPERS to sell its tobacco stocks and invest in inner cities. CalPERS embraced another Angelides issue Monday by adopting a "green" plan to invest up to $500 million in "environmentally screened stock funds."

CalPERS also has pushed hard on corporate wrongdoing, helping force the ouster of New York Stock Exchange Chairman Dick Grasso. Its latest campaign revolves mainly around a single issue: Should a company's outside auditor be allowed to perform tax-consulting or other non-audit work for the company?

CalPERS contends it's a conflict of interest. An auditing firm with a lucrative consulting contract might look the other way at questionable practices while auditing the client's books. As an example, CalPERS argues that Arthur Andersen may not have examined Enron's books as closely as it should have because it didn't want to jeopardize its consulting contracts with Enron.

A year ago, CalPERS sent companies a letter warning that it wanted them to change their policies onauditors - or it would vote against directors who sit on their audit committees, the panels that oversee the annual audit.

"It shouldn't be a surprise to them," said CalPERS spokesman Brad Pacheco.

CalPERS is taking on this issue largely on its own. Other big pension funds that publicly stood with CalPERS on other issues, such as the ousters of Grasso and Disney CEO Michael Eisner (who lost his title of chairman), have largely sat this one out - or at least are acting more quietly.

For instance, the California State Teachers Retirement System has cast some of the same votes as CalPERS but hasn't publicized its efforts. CalSTRS also isn't going after as many companies, looking at the auditors' work "on a case-by-case basis," said CalSTRS official Brian Rice.

Board members are being re-elected left and right, without CalPERS' support. On Tuesday, for instance, Citigroup Inc. shareholders overwhelmingly re-elected board Chairman Sanford Weill. CalPERS voted its shares against him, blaming him for investment scandals that cost the financial services conglomerate millions of dollars.

CalPERS has gotten some results, though. When CalPERS said it would vote against four Applied Materials directors, the company sent a note to the pension fund saying it would no longer hire its auditor, PricewaterhouseCoopers, to perform non-audit work. Pacheco said CalPERS then agreed to support the four directors.

And on Monday American Express disclosed that it had sent an e-mail to CalPERS saying it has been scaling back the non-audit work done by its audit firm - and said it would discontinue the work entirely by year's end. CalPERS has now agreed to support the four board members against whom it was planning to vote, Pacheco said.

Paul Lapides, a corporate governance expert at Kennesaw State University in Georgia, said the CalPERS campaign is raising powerful and legitimate questions. "It's getting people's attention," he said.

But Charles Elson, an expert at the University of Delaware, said CalPERS might weaken its case by going after so many companies. "They need to pick their battles carefully," he said.

The CalPERS campaign has drawn criticism, too. After Cal-PERS - and pension funds in New York, Connecticut and Illinois - voted against Safeway Inc. CEO Steven Burd, the grocery said the votes represented organized labor's retaliation against Burd's leadership role in the recent Southern California supermarket strike.

Pacheco denied the charge and added that CalPERS President Sean Harrigan - an official with the union that went on strike - had recused himself from the debate on Safeway.

Nevertheless, others believe CalPERS is getting carried away.

"We think it's completely gone too far," said spokeswoman Tita Freeman of the Conference Board, a New York-based organization that represents major corporate CEOs.

She said CalPERS and other pension funds are using workers' and retirees' money to pursue an activist social agenda that threatens the value of their funds.