The rise of index fund investing has led to a shift in shareholder democracy, with large fund companies like BlackRock, Vanguard, and State Street holding significant power in corporate decision-making. Traditionally, these companies made all voting decisions for fund shareholders, but recent initiatives aim to give investors more control over proxy voting, allowing them to express preferences on issues such as climate change and social responsibility. This shift towards proxy voting choice reflects a growing demand for ethical and sustainable investing practices among investors. By offering policy choices in proxy voting, fund companies are acknowledging the importance of aligning investment decisions with environmental, social, and governance (ESG) principles. While these developments represent progress towards greater shareholder engagement, challenges remain in translating voting policies into meaningful action on pressing issues such as labor rights, climate change, and social justice.

https://www.nytimes.com/2024/02/23/business/vanguard-blackrock-state-street-investing-voting.html