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William McNabb, the chief executive of Vanguard Group, which has been increasingly engaging with American corporations.

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Tim Shaffer/Reuters

The activist hedge-fund manager Paul Singer recently warned that the rise of so-called passive investing risked distorting markets and “devouring capitalism.”

But although index-tracking funds can’t sell stocks when they spot trouble ahead, they aren’t without influence.

Vanguard demonstrated as much with its latest report on investment stewardship. The giant $4.5 trillion mutual-fund manager stepped up its corporate engagement activity in the 12 months that ended in June, holding discussions with more than 900 companies around the world on governance, pay and other issues. It also voted against management at Exxon Mobil, Viacom and Wells Fargo on climate change, pay and the like. And it supported 47 percent of board-related proposals put forward by outside shareholders at American companies, up from 17 percent the previous year.

The company, founded by the indexing pioneer John C. Bogle, has been slower than its rival BlackRock to find a more active voice. Vanguard describes its engagements anecdotally without identifying companies, unlike BlackRock, a $5.7 trillion manager led by Laurence D. Fink, which used a recent report to provide detailed arguments against Exxon Mobil’s refusal to disclose its climate-related risks and against drugmaker Mylan’s executive-pay policies. Vanguard’s detailed proxy-voting record shows its votes lined up alongside BlackRock’s at both companies.

In an open letter to corporate directors, Vanguard’s chairman and chief executive, F. William McNabb III, said the firm was determined to press its investors’ interest and prod companies to manage for the long term precisely because the index funds that make up nearly three-quarters of its assets hold their securities almost indefinitely.

Among other things, he stressed the need for gender diversity on boards, an issue that another indexing heavyweight, State Street Global Advisors, championed this year, too.

Index-tracking managers may not throw their weight around publicly like Mr. Singer’s Elliott Management and other activists, but their sheer size gives them sway. Vanguard alone owns on average more than 6 percent of every company in the Standard & Poor’s 500 index. In one specific instance, it joined the large vote against Stephen Sanger’s re-election to Wells Fargo’s board over the bank’s unauthorized accounts scandal, contributing to the bank’s recent decision to replace Mr. Sanger as chairman with Elizabeth A. Duke.

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