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Bogle Among the Rare Few Who Put Shareholders First


John C. Bogle, founder and former chairman and CEO of Vanguard, has received many awards in his lifetime. In 1999, Fortune designated him one of the investment industry's four "Giants of the 20th Century." Princeton University honored Bogle with the Woodrow Wilson Award for "distinguished achievement in the nation's service." In 2004, Time named Bogle one of the world's 100 most powerful and influential people.

On Oct. 26, Bogle received yet another fitting accolade, from FUSE Research Network, the first annual award for Lifetime Impact and Commitment to Investors.

It will, without question, be a challenge for FUSE to find other recipients for such an honor in the years to come, for John C. Bogle is one of the very few who has devoted his entire career to serving investors.

As he says it himself in this issue, Bogle has long been a proponent of achievable earnings growth and honest accounting, of corporations acting responsibly to deliver consistent, long-term growth, and of management putting the interests of shareholders above their own. "Our business principles have been diluted," Bogle says. "There are far fewer absolute standards in the conduct of business-and much greater acceptance of relative standards."

Until the late-trading and market-timing scandal, mutual fund executives held themselves out as reliable proponents of fiduciary duty. As trustworthy guarders of investors' life savings.

But in 2003, they lost those bragging rights forever, when more than a dozen fund companies were charged with making side deals with hedge funds to boost assets under management. It became sadly apparent that even though the mutual fund industry is responsible for America's retirement savings, it is run as basely as any other profit-seeking business. Just last week, there was news that the FBI, the Manhattan U.S. Attorney General and the Securities and Exchange Commission are investigating insider information from "expert network" consultants by hedge funds and mutual funds. This insider-trading probe could blow all others out of the water, regulatory insiders warn.

We can only hope that they are wrong and that others with the ethics and principles of John C. Bogle will step forward. There are far too few who put shareholders first.