In_PRP the_AT0 near_AJ0 future_NN1 ,_PUN giant_AJ0 index_NN1 funds_NN2 ,_PUN those_DT0 low-cost_AJ0 investments_NN2 that_CJT have_VHB helped_VVN millions_CRD of_PRF people_NN0 to_TO0 build_VVI nest_NN1 eggs_NN2 ,_PUN will_VM0 gain_VVI "_PUQ practical_AJ0 power_NN1 over_PRP the_AT0 majority_NN1 of_PRF U.S._NP0 public_AJ0 companies_NN2 ._SENT "_PUQ That_DT0 nightmarish_AJ0 vision_NN1 originated_VVN in_PRP a_AT0 prescient_AJ0 2018_CRD paper_NN1 by_PRP John_NP0 Coates_NP0 ._SENT Mr._NP0 Coates_NP0 was_VBD a_AT0 professor_NN1 of_PRF Harvard_NP0 Law_NN1 School_NN1 when_CJS he_PNP laid_VVD out_AVP his_DPS argument_NN1 —_PUN one_PNI that_CJT I_PNP share_VVB ._SENT Now_AV0 ,_PUN he_PNP is_VBZ a_AT0 policymaker_NN1 ._SENT In_PRP February_NP0 ,_PUN he_PNP became_VVD acting_VVG director_NN1 of_PRF the_AT0 Securities_NN2 and_CJC Exchange_NN1 Commission_NN1 's_POS division_NN1 of_PRF corporation_NN1 finance_NN1 ._SENT Under_PRP the_AT0 new_AJ0 reform-minded_AJ0 S.E.C._NP0 chairman_NN1 ,_PUN Gary_NP0 Gensler_NP0 ,_PUN Mr._NP0 Coates_NP0 is_VBZ in_PRP a_AT0 position_NN1 to_TO0 address_VVI the_AT0 problems_NN2 he_PNP has_VHZ analyzed_VVN so_AV0 painstakingly_AV0 ._SENT Neither_AV0 Mr._NP0 Coates_NP0 nor_CJC Mr._NP0 Gensler_NP0 was_VBD available_AJ0 for_PRP an_AT0 interview_NN1 ,_PUN but_CJC in_PRP that_DT0 paper_NN1 ,_PUN Mr._NP0 Coates_NP0 laid_VVD out_AVP his_DPS views_NN2 ._SENT Index_NN1 funds_NN2 ,_PUN which_DTQ simply_AV0 track_VVB the_AT0 market_NN1 and_CJC make_VVB no_AT0 attempt_NN1 to_TO0 outperform_VVI it_PNP ,_PUN are_VBB so_AV0 effective_AJ0 and_CJC cheap_AJ0 ,_PUN he_PNP said_VVD ,_PUN that_CJT they_PNP have_VHB become_VVN the_AT0 investment_NN1 vehicle_NN1 of_PRF choice_NN1 for_PRP trillions_CRD of_PRF dollars_NN2 of_PRF assets_NN2 ._SENT Yet_AV0 under_PRP current_AJ0 rules_NN2 ,_PUN it_PNP is_VBZ the_AT0 index_NN1 fund_NN1 executives_NN2 ,_PUN not_XX0 the_AT0 millions_CRD of_PRF people_NN0 who_PNQ invest_VVB in_PRP them_PNP ,_PUN who_PNQ have_VHB the_AT0 power_NN1 to_TO0 cast_VVI proxy_NN1 votes_NN2 ._SENT Those_DT0 votes_NN2 are_VBB the_AT0 heart_NN1 of_PRF a_AT0 system_NN1 intended_VVD to_TO0 give_VVI investors_NN2 a_AT0 voice_NN1 on_PRP crucial_AJ0 matters_NN2 like_PRP how_AVQ much_DT0 the_AT0 chief_AJ0 executive_NN1 is_VBZ paid_VVN or_CJC whether_CJS a_AT0 company_NN1 is_VBZ damaging_VVG the_AT0 environment_NN1 ._SENT As_CJS I_PNP wrote_VVD in_PRP December_NP0 2019_CRD ,_PUN that_DT0 lack_NN1 of_PRF proxy_NN1 voting_NN1 capability_NN1 leaves_VVZ vast_AJ0 numbers_NN2 of_PRF investors_NN2 out_AVP of_PRF the_AT0 equation_NN1 ,_PUN and_CJC gives_VVZ corporations_NN2 inordinate_AJ0 power_NN1 ._SENT Consider_VVB that_CJT roughly_AV0 half_DT0 of_PRF all_DT0 American_AJ0 households_NN2 ,_PUN comprising_VVG tens_CRD of_PRF millions_CRD of_PRF people_NN0 ,_PUN have_VHB a_AT0 stake_NN1 in_PRP the_AT0 stock_NN1 market_NN1 ._SENT But_CJC most_AV0 own_DT0 equities_NN2 indirectly_AV0 through_PRP funds_NN2 —_PUN mainly_AV0 index_NN1 funds_NN2 ._SENT That_DT0 leaves_VVZ fund_NN1 managers_NN2 with_PRP the_AT0 decisive_AJ0 power_NN1 over_PRP corporate_AJ0 governance_NN1 ,_PUN and_CJC the_AT0 biggest_AJS fund_NN1 companies_NN2 have_VHB sided_VVN with_PRP management_NN1 roughly_AV0 90_CRD percent_NN0 of_PRF the_AT0 time_NN1 ._SENT As_CJS Mr._NP0 Coates_NP0 wrote_VVD in_PRP 2018_CRD ,_PUN "_PUQ Control_NN1 of_PRF most_DT0 public_AJ0 companies_NN2 —_PUN that_DT0 is_VBZ ,_PUN the_AT0 wealthiest_AJS organizations_NN2 in_PRP the_AT0 world_NN1 ,_PUN with_PRP more_DT0 revenue_NN1 than_CJS most_DT0 states_NN2 —_PUN will_VM0 soon_AV0 be_VBI concentrated_VVN in_PRP the_AT0 hands_NN2 of_PRF a_AT0 dozen_CRD or_CJC fewer_DT0 people_NN0 ._SENT "_PUQ The_AT0 title_NN1 of_PRF his_DPS paper_NN1 was_VBD "_PUQ The_AT0 Problem_NN1 of_PRF Twelve_CRD ,_PUN "_PUQ referring_VVG to_PRP the_AT0 unelected_AJ0 leaders_NN2 of_PRF index_NN1 fund_NN1 operations_NN2 ._SENT What_DTQ 's_VBZ worse_AJC ,_PUN mutual_AJ0 fund_NN1 companies_NN2 are_VBB frequently_AV0 conflicted_VVN ._SENT Many_DT0 receive_VVB revenue_NN1 from_PRP publicly_AV0 traded_AJ0 corporations_NN2 for_PRP providing_VVG financial_AJ0 services_NN2 connected_VVN to_PRP retirement_NN1 plans_NN2 ,_PUN yet_AV0 have_VHB the_AT0 responsibility_NN1 of_PRF casting_VVG critical_AJ0 votes_NN2 on_PRP how_AVQ those_DT0 companies_NN2 are_VBB run_VVN ._SENT 
