This article brings up an interesting question. In essence when you buy an index who controls the voting rights to those shares, maybe secondarily who should control it? If I had a hypothetical company with public equity, but no index holders vs a company where all my public holders , outside the officers were index holders how would things be different? I would submit in the case of multiple small holders, none of them can really influence the decisions put up to a vote, because the insiders have control of the proxy machinery of the business. The possibility exists for one large holder to buy out the passive minority holders, and form a block that can influence things, but that is not the norm ( especially with modern takeover provisions). If you have all index holders, that removes the possibility (since the index is only selling when people are redeeming), basically further entrenches management. I could imagine a third scenario where the index decides to monitor corporate decisions, and vote down anything that is bad for shareholders, but the time and effort to do this for every company that is indexed would be enormous and prohibitive. Also if the index decided to start playing in corporate decision-making, doesn't that defeat the passive nature of it?