[michaelt]

Well, index funds vote in accordance with a published policy like https://corporate.vanguard.com/content/dam/corp/advocate/inv...

So the boards don't have totally unchecked power. But despite that policy being 22 pages long, it doesn't pay any attention to companies' individual circumstances.

Vanguard's voting policy doesn't have an opinion on EA's lootboxes, or Intel's 18A node, or Disney's approach to Star Wars.

[twoodfin]

That’s what Vanguard investors are paying for, or rather, not paying for.

Passive investing is cheaper, this is what “passive” means.

Historically, in the aggregate, boards of US public companies are competent enough to create good returns without strategic investor direction.

[FredPret]

You can’t easily dismiss the problem by pointing to history.

In those historic times, stock ownership was much more restricted to rich investors (not a good thing) who are far more opinionated in AGMs (a very good thing) than some faceless index fund or Robin Hooder who doesn’t even realize they should vote at all.

So boards used to perform but they also used to have pressure to perform. Will they still perform on autopilot? Maybe, but chaos always wins unless there’s a forcing function (your votes at the AGM).