Passively managed index funds now hold over 25% of U.S.mutual fund and ETF assets. The rise of index investing raises fundamentalquestions about monitoring and corporate governance. We examine the voice andexit mechanisms and find that compared to active funds, index funds rarely voteagainst firm management on contentious corporate governance issues, and do notuse exit to express dissatisfaction with firm management. Moreover, across avariety of tests, we find no evidence that index funds engage with firmmanagement. Our results suggest that the rise of index investing is shiftingcontrol from investors to firm managers.