It would be nifty if there were a proxy mechanism whereby index fund shareholders could vote their underlying shares. It's technologically feasible, I have no idea if there are any legal hurdles, or if it's simply something no funds have bothered to implement yet.
The issue here is that in order to intelligently vote such shares, passive investors would need to invest time and effort to understand how board members voted, what their interests were, etc. What percentage of passive investors are going to make that kind of effort?
