Chapter 21
On Leadership
A Sense of Purpose
Whether the vision and boldness of the entrepreneur were responsible for the creation of Vanguard or, far more mundane though it may be, the new firm sprang from a mere “uncanny ability to recognize the obvious ” does not really matter. Once the struggles of 1974 to 1981 were over and the firm’s full scope and structure had been developed, there remained the far more difficult challenge of implementing the strategy entailed by that structure. What attributes of leadership would be required? And what direction would that leadership take?
Creative leadership is often required to give a new venture, above all, a sense of purpose. What kind of leadership it should be relates not only to the nature of the enterprise, but to the nature of the leader. What manner of human being is the leader? Here, I will try to speak with special candor. I am, like all human beings, a peculiar balance of contradictions: a large ego and a deep humility; a decent intelligence (no more than that), albeit with periodic blind spots and stupidities; a strong presence along with a profound insecurity; an astonishing confidence, but one that is often punctuated with doubt; an intellectual bent that lacks an academic depth; an aspiring, passionate leader, but without the skills—or, for that matter, the interests—of a manager.
I mention this litany to suggest that I’ m no more, nor less, than any other person. I am just another human being. Yet, with some examples based on my experience, perhaps I can tell you a bit about what has brought me through a wonderful life and career. In this chapter, I focus on the direction of leadership at the enterprise I envisioned, founded, and named, and for which, over what will soon be 25 years, I’ve attempted to develop sound values.
Starting a new firm, with a new name and a clean slate to write on, I had only one ambition. It had nothing whatsoever to do with building a firm with huge assets and dominant market share, nor with getting rich personally, nor with anything that can be counted. As I told our directors at the outset, my goal was straightforward: To make Vanguard the proudest name in the mutual fund industry. And I was absolutely determined to lead Vanguard toward that goal.
The Majesty of Simplicity
The business side of the firm would be based on the majestic, if basic, idea of simplicity. Our funds would have clearly stated investment objectives, explicit investment policies, and precise performance measurement standards. Their portfolios would be broadly diversified, conservatively managed, and invested largely in high-quality securities. We would hold costs to the minimum. (Apparently almost solo, I had discovered the best-kept secret of the investment business: Gross investment return minus the cost of management equals the net return earned by the investor. It’s not very complicated.)
With this less-than-remarkable insight, Vanguard could say—though we didn’t dare to say it in public for quite a few years—that the central task of investing is to realize the highest possible portion of the annual returns earned in the financial markets by a chosen asset class—stocks, bonds, or money market securities alike—
recognizing and accepting that that portion will be less than 100 percent.
aiThe recognition of this reality finds its apotheosis in our low-cost index funds and our clearly defined fixed-income funds, which provide close to 99 percent of the annual returns in the financial markets in which they invest. For the record, the portion provided by the average actively managed mutual fund—stock, bond, and money market—has been about 85 percent. With the fundamental Vanguard goal of placing the interests of our clients first—via our service orientation, our mutual structure, and our focus on low costs—we have had the best possible opportunity to approach that 100 percent desideratum, a clear manifestation of the value of simplicity.
Once the overarching goal was set, simplicity helped to determine the leadership strategy for our enterprise. I believed that we required not one, but many leaders in order to deal with the growth that I envisioned. Not just the big shots, but the leaders on the crew—those above and below decks, those who load the cannons and those who fire them; those who let out the sheets and those who man the lines; those who make the ship sail and those who help navigate the course—all must make their own contributions over the years, and all must receive commensurate credit. Nonetheless, the person at the helm—the captain—assumes the ultimate responsibility for the voyage, so I’m going to sketch briefly some of the attributes of leadership that have seemed most important to me. Using some highlights of our history, I’ll discuss how leadership depends on opportunity, readiness, foresight, a sense of purpose and a passion, being a servant as well as a leader, failure and determination, patience and courage. To one degree or another, all of our leaders at Vanguard—indeed, most human beings—share most of these attributes. Perhaps what matters is only how strong they are, how they are balanced, and whether they can be summoned at the opportune moment.
A Fortuitous History
To begin with the big picture, how did Vanguard grow from a mom - and-pop enterprise managing investor assets of $1 billion when it was founded almost 25 years ago to the $450 billion mutual fund complex it is today? Let’s be fair. We started in 1974 in the worst of times—the bottom of the worst bear market since the Great Depression. Today, we find ourselves in the best of times—at the top of the greatest sustained bull market in U.S. history for stocks and, lest we forget, for bonds, too. I’ve said a thousand times, “Never confuse genius with luck and a bull market.” We’ve surely enjoyed both.
In Chapters 15 and 20, I described how luck brought me into this business and was responsible for many elements of our development: the 1949 Fortune article on the then tiny mutual fund industry; my Princeton senior thesis; my mentor, Walter L. Morgan; The Naval Achievements of Great Britain and the Vanguard name; the Samuelson, Ellis, and Ehrbar articles in 1975 and 1976 that helped inspire the first index fund. When these fortuitous events are strung together, the luck that permeates the Vanguard story takes on almost legendary proportions. But true it is. Luck, which I’ll dignify by calling it opportunity, is often—perhaps always—a necessary precursor of leadership. (Given the role of luck in our lives, it behooves those who emerge as leaders to have a healthy sense of humility.)
Readiness and Foresight, Purpose and Passion
But luck is never enough. The leader needs to be ready when opportunity knocks. It is sad when we don’t get any breaks in this life, and sadder still when we don’t recognize them when they make their appearance. But the saddest thing of all is not to have readied ourselves to make the most of them. As the brilliant French chemist Antoine-Laurent Lavoisier said: “Fortune favors the prepared mind.” When opportunity knocked, I was prepared to offer a strategy that would be in tune with the times to come. It didn’t take great insight to foresee—accurately, as it turned out—a coming age of rising family incomes and wealth, increasing financial savvy, and pervasive investor education in the United States. The age of the discriminating, intelligent individual investor would ensue. So let’s mark readiness as the first—or at least the earliest—attribute of leadership.
When all of those earlier breaks came home to roost and Vanguard was created, we set out to provide investors with the very best value that we could. Such a strategy would require sound investment policies, exceptionally low operating costs, and the elimination of sales commissions. Our ideas were poised for acceptance, and Vanguard became the lowest-cost provider of financial services in the world, thereby able to provide commensurately higher returns to our shareholders. That change in the investing environment may seem obvious today; that strategy would surely be the obvious response. Let me add only that they seemed equally obvious to me in 1974. Let’s mark foresight as a second attribute of leadership.
A third attribute is, as I mentioned at the outset, a sense of purpose. In 1974, we made a decision about where we wanted to go, and a commitment to get there ethically. A strong moral compass would be our guide. Our sole purpose was to serve our shareholders—those who would entrust the stewardship of their financial future to us. We created a corporate structure in which our clients literally became our owners, a structure that remains unique in the mutual fund industry to this day. As I have noted, the current aphorism “Treat your customers as your owners” took on real meaning for us. Our corporation turned its ownership over to the shareholders of our mutual funds—not, as in industry practice, to a privately or publicly held profit-seeking corporation. I’ve been called a fool, a communist, and even a Marxist—and in public, at that—for creating our corporate structure, unique in the fund industry. To me, however, that structure represents the very essence of capitalism: the control of the corporation by its shareholders.
What flowed from our founding purpose was a simple business strategy: Earn the highest possible returns for our shareholders, take care to invest their dollars wisely, and operate at the lowest cost structure in our industry. We have operated a tight ship, with minimal extravagance. We do not provide our leaders with lavish perquisites, first-class travel, or executive dining rooms. For our mutual funds in which we retain external investment advisers, we negotiate fees at arm’s length, and, as a result, pay fees that are fair to our advisers and fair to our shareholders. We don’t waste the dollars of our investors on expensive marketing endeavors. Others in this industry don’t look at low costs as being very significant. But we are providing, each day, the proof of a logical and unarguable proposition: When other factors are held constant, the lower the costs, the higher the returns earned by the investors. Cost matters.
Our sense of purpose called on us not only to prove this proposition and live by it, but also to convey the message to investors. The magnificent English language gives us a marvelous medium in which to convey it, and the flexibility to convey it in a thousand different ways. I wrote all of our fund annual reports for more than 20 years, have given some 50 speeches to the entire crew, have spoken in public all over the United States and across both the Atlantic and Pacific, and have done my best to drive home to investors the powerful sense of purpose that drives the Vanguard mission.
Purpose without passion, however, rarely does the job. In Hegel’s words, “nothing great in the world has been accomplished without passion,” and I too have come to regard passion, the fourth trait that I cite, as one of the central characteristics of leadership. A flamboyant display of passion is hardly necessary; a quiet passion that brooks no doubt about its intensity is equally adequate, perhaps even better. Similarly, the enthusiasm and energy that come into the picture may just as easily be contained as kinetic. It all depends on the leader. But whatever the case, passion is essential to the ability to inspire people. Therein lies the difference between management (achieving goals and getting the job done) and leadership (establishing goals, having a vision, and enlisting good people to willingly take up the cause). It must be clear that leadership holds sway in taking the dream to reality, and then to fruition. Management, however, may—perhaps must—finally ride in the saddle when the principles and values of the enterprise have met the test of time, and when growth brings maturity. It is also possible, if not likely, that the years of struggle are more satisfying than the years of forward momentum to the passionate leader. Surely it is those early years that demand the kind of passion evoked by the words of the great sculptor of Mt. Rushmore, Gutzon Borglum: “Life is a kind of campaign. People have no idea what strength comes to one’s soul and spirit through a good fight.”
The Power of Words
In striving to convey purpose and passion, I rely heavily on using the right words. At Vanguard, we have barred the use of employee, which suggests a spirit of master versus servant; customer , indicating a buyer who does business opportunistically with many different purveyors; and product, a synonym for a consumer good such as toothpaste, beer, or canned soup, created to meet the tastes of the day. Instead, we use crewmember, part of the team on which any successful voyage depends; client, a person with whom we establish a long-term financial relationship; and mutual fund, reflecting the fiduciary nature of the services we offer. This choice of words has helped shape the way our investors look at us and the way we look at ourselves.
When I can’t find the right words, I ’m not above using the words of others, particularly if they turn to the nautical or the inspirational. When I first dedicated Vanguard’s headquarters, I recalled a sermon given by the Very Reverend Francis B. Sayre Jr., Dean of the Washington (D.C.) Cathedral, when “the tall ships” arrived in Newport, Rhode Island, on July 4, 1976. His words reminded me of Vanguard. In our early years, we faced strong headwinds and high seas. When success seemed impossible, we had to wrest from that opposing wind each yard of progress toward our destiny. But from the time of that 1983 dedication until today, we have experienced affluent and easy times, with tide and breeze at our back. How similar to Dean Sayre’s impassioned words about America:
Sailors know what some citizens have forgot in this latter day; that no purpose is achieved, nor any course made good upon God’s ocean, until first you have trimmed your sails and set the helm to fit His winds and the set of His tide upon the deep.
Keen is the mariner’s eye to discern those telling signs upon the clouds, at the line ’twixt sky and water, or on the crest of waves where spindrift blows, by which he might foretell the bluster or the calm, the weather God has in store for him.
And if he is so fortunate as to find a wind that blows from Heaven exactly in the direction he would go on earth, then easy and gay the skipper who can barrel down before the wind, all canvas set, rolling upon the bosom of the blast. This has been America in these latter times; affluent and easy, not having to work very hard to run out her log; just cruising wing and wing, tide and breeze at her back, and the men lolling upon the deck.
But more often in this world it is a headwind that we face. Then, though the bearing of your destination be precisely the same, you have to tack—back and forth, back and forth; close-hauled; wind in your face, spray on your legs; fingers white upon the sheet, body tense against the bucking tiller; fine-tuning your lively lade to the majestic forces of splendid Creation; and so wresting from that opposing wind the destiny of your desire.
That’s when your boat must be staunch and true, well braced and put together, and lithe like a living thing. And that is when the sailor too is on his mettle, no less in command for all his reverences in the presence of a power mightier than his own.
Servant Leadership
A fifth leadership trait may seem paradoxical: the idea of the leader as servant. The concept of servant leadership did not come to me quickly or easily. Indeed, during at least the first decade of Vanguard’s history, when we were a very small organization, I was probably considered an autocrat. But I like to think that I used power not for its own sake, but to force my novel ideas on a world that looked at them with skepticism, and to develop an organization with a sense of higher values than might be expected from a typical commercial enterprise. I tried to use whatever intellectual power I had to develop and implement new ways of investing, and whatever moral power I possessed to inculcate ideas such as integrity and fair dealing, candor, and respect for the individual into a business enterprise that would survive and prosper in a highly competitive world.
For many years, my ideas about running our organization were disorganized, even inchoate. But, as they developed, I articulated them to our crew in frequent all-firm meetings, even setting forth a specific “Vanguard manual of values” in 1987. Around that time, I had begun to read the writings of Robert Greenleaf, a senior executive of American Telephone & Telegraph Corporation and a visiting lecturer at MIT Sloan School of Management and Harvard Business School. He introduced me to the concept of servant leadership and the development of a model institution in which everyone is part leader, part servant. The goal of these dedicated human beings is to raise to great purpose both those whom they serve and those with whom they serve.
Greenleaf on Servant Leadership
During his career, Robert Greenleaf did an awesome amount of speaking, teaching, and writing about the role he believed his servant-leadership concepts could play in making corporations more humanistic in their focus as well as more successful business enterprises. His ideas rang true to me. In
Servant Leadership, he wrote: “The very essence of leadership is going out ahead to show the way, an attitude that is derived from more than usual openness to inspiration. Even though he knows the path is uncertain, even dangerous, a leader says: ‘I will go; come with me.’ ”
1 (Here, I am confident that he was referring not only to a sort of grand idea of corporate leadership, but also to the infinite number of tasks where less sweeping forms of leadership are required if an enterprise is to succeed.)
In his focus, business was not peripheral. It was central. He was deeply concerned about creating a superior company with a liberating vision:
What distinguishes a superior company from its competitors is not the dimensions that usually separate companies, such as superior technology, more astute market analysis, better financial base, etc.; it is unconventional thinking (Continued) about its dream—what this business wants to be, how its priorities are set, and how it organizes to serve. It has a radical philosophy and self-image. According to the conventional business wisdom, it ought not to succeed at all. Conspicuously less successful competitors seem to say, “The ideas that the company holds ought not to work, therefore we will learn nothing from it.”
In some cases, the company’s unconventional thinking about its dream is born of a liberating vision. But in our society liberating visions are rare. Why are liberating visions so rare? They are rare because a stable society requires that a powerful liberating vision must be difficult to deliver. Yet to have none is to seal our fate. We cannot turn back to be a wholly traditional society, comforting as it may be to contemplate it. There must be change—sometimes great change.
That difficulty of delivery, however, is only half of the answer. The other half is that so few who have the gift for summarizing a vision, and the power to articulate it persuasively, have the urge and the courage to try. But there must be a place for servant leaders with prophetic voices of great clarity who will produce those liberating visions on which a caring, serving society depends.
I leave to far wiser—and more objective—heads than mine the judgment about whether Vanguard meets the definition of a superior company. But while I believe that it does, I have no hesitancy in saying that it is the product of unconventional thinking about what we want to be, how we set priorities, and how we organize to serve our clients. We have dared to be different, and it seems to be working just fine.
As Vanguard has grown from a small enterprise to a giant one, the challenges of leadership have changed radically. Mr. Greenleaf had some thoughts about that issue, too:
The line that separates a large business from a small one might be drawn at that point where the business can no longer function well under the direction of one individual. If the company has been built largely on one person’s drive, imagination, taste, and judgment, it may be difficult to recognize when that point has been reached. The greatest risk may be that the company cannot grow and keep its present quality.
At that point, the leader must turn toward building an institution, managing the process that gets that job done, the first step toward the ultimate optimal long-term performance of a large business that is managed by a board of directors who act as trustees. The result would be an institution that would have the best chance of attracting and holding in its service the large number of able people who will be required to give it strength, quality, and continuity if it is to continue to do on a large scale what it was able to do well on a smaller scale.
The successful leader must take on the exciting challenge of transforming a one-person business into an institution that has autonomy and creative drive as a collection of many able people, one that has the capacity for expansion and even enhancing the claim to distinction it has already achieved.
Only time will tell the degree to which we can meet that challenge. But the goal (using Mr. Greenleaf’s words) can be achieved only if “the people who staff the institution do the right things at the right time because the goals are clear and comprehensive and they know what ought to be done, and do the right thing without being instructed. It takes a strong leader to put the people who serve first, but that is the way to insure that they will deliver all that people can deliver—and to insure that the business will continue to lead in its field.”
Mr. Greenleaf articulated the concept of a distinguished serving institution in which “all who accept its discipline are lifted up to nobler stature and greater effectiveness than they are likely to achieve on their own.” He suggested that an understanding of leadership and followership would be required because “everyone in the institution is part leader, part follower.” Then he added this vital thought: “If an institution is to achieve as a servant [as was the mission called for by Vanguard’s structure and strategy], then only those who are natural servants—those who want to lift others—should be empowered to lead.” To this point I would add (and I think Mr. Greenleaf would agree) that even as leaders give strength to those who choose to follow, so the best leaders gather strength from those who have chosen to follow. In any event, it is hard to know whether the coincidence of this philosophy and my own is merely fortuitous—a happy accident, random molecules bumping together in the night—or powerful evidence of the mysterious universality of a great idea. Perhaps a little of each is present. Nonetheless, it has been an important part of how I’ve tried to lead Vanguard.
Failure and Determination
The next trait may surprise you, but I have come to regard failure as another essential of leadership. It is often best if things do not come too easily in this life. When I was fired in 1974 from my position as the chief of the mutual fund company I had joined in 1951, I had somehow failed. But out of the ashes of that painful experience arose, like the phoenix, the firm that appears to be “in the vanguard” of the mutual fund field today. Failure, too, seemed to plague our every early step. We experienced net cash outflow from the mutual funds that our new firm administered for 80 consecutive months—think of that!—but in adversity, we gained strength and learned important disciplines. Now, years later, we continue to deal with periodic failures. That they have been overwhelmed by our successes is beside the point. We must still learn from them.
If you must fail, then you must fight. Persistence, the next leadership trait, was essential in our battle, for it was to take time to bring our corporate structure and our business strategy into full flower. The deck was stacked against us at the outset, as our perhaps properly cautious directors were unwilling to create this mutual structure de novo. We had to struggle through those early years and persist in seeking the final fruition of our efforts as we moved from our sole role as fund administrator to index fund manager and to fund distributor, but only after overcoming the well-intentioned but misguided opposition of the Securities and Exchange Commission. We took the final step in becoming the full-line mutual fund complex we are today by assuming our first direct responsibilities for traditional active investment management immediately thereafter, in 1981. After seven long years, our structure was at last in place. (The assets we manage internally currently total $260 billion, about 60 percent of our total asset base.) It wasn’t easy—nothing worthwhile ever is—but I think we can mark determination (call it persistence if you will) as a sixth attribute of leadership.
Patience and Courage
Paradoxically, our persistence had to be accompanied by patience, another trait of leadership. My favorite example is our pioneering foray into market index funds—today, sadly enough, the “industry darling” or, God forbid, “hot product.” Struck by the insight that matching the stock market at minimal costs would, over time, give a low-cost passively managed index fund a near certainty of outpacing the vast majority of high-cost actively managed funds, Vanguard formed the first index fund in 1975. This grand and pioneering idea was scorned by others. But our patience, combined with our persistence, carried the day.
Leadership for the Future
What are the elements of successful leadership? In
Leadership in Financial Services, Steven I. Davis surveys the financial services industry around the globe to identify the characteristics of the most successful financial leaders of the twentieth century. His views closely parallel my own, but they carry an objectivity that mine lack. Here are Davis’s words about leadership attributes that he identified during his research:
Vision. Successful leaders possess a comprehensive view of the leadership role: a vision or direction of where they want to go, a sense of the processes needed to achieve these goals, and a clear view of what they have to do as individuals within this process.
Core Values. Successful leadership demands respect for the individual and personal integrity, which are inextricably linked with providing value for investors. Continuity of leadership over an extended period of time is essential to the development of common values and cultures.
The Implementation of Leadership. Having set the direction and the values, the leader’s next task is to provide the single-minded determination to make it happen. Leaders spend a vast amount of time communicating at all levels of the organization, from one-on- one dialogues to speeches to hundreds of colleagues. A leader must be there in person, taking direct responsibility for tough decisions, projecting his own personality and character so his followers can see that he is a real person with whom they can identify.
Resolving Conflict. Leaders have to make decisions which may go strongly against the views of their colleagues . . . despite his desire to respect others’ views and keep the people in the organization aligned, the creator of the firm must take the direction he feels is best.
Energy. In the exhausting, perpetual struggle to communicate the leadership message, the leader must, quite simply, do as he is asking others to do. It requires a full-time commitment to the institution and the message, not only a mission, but a high degree of personal energy.
2
Some attributes of leadership no doubt defy distillation into a simple set of principles. They are the unique products of a single individual’s experience, intellect, and character. Davis nonetheless identifies guideposts that can mark the way for the leaders of the future.
The initial offering in 1976—expected to be $150 million—brought in just $11 million. The S&P 500 Index suffered a rare, but substantial, lag in returns relative to most fund managers in 1977 -1982, and six years elapsed before our index fund reached the original objective of $150 million. Even in the booming fund industry, that first index fund didn’t cross the $1 billion mark until 1990, 15 years after its introduction. But we ran the fund patiently and efficiently, watched it begin to outpace active managers, and then watched its margin of extra return grow steadily. Our confidence that it would work as we had promised has been vindicated—and then some. Indexing has burgeoned, and Vanguard—with indexed assets of $150 billion, spread among 28 funds keyed to various market indexes—is far and away the industry leader. Patience triumphed. (A personal note: I once received a letter from a shareholder who described me as “impatient for action, but patient for results.” That seems an accurate enough depiction of my approach to indexing.)
To wrap up this litany, I put before you—both tentatively and humbly—a final attribute of leadership: courage. Sometimes, an enterprise has to dig down deep and have the courage of its convictions—to press on, regardless of adversity or scorn. Vanguard has been a truly contrarian firm in its mutual structure, in its drive for low costs and a fair shake for investors, in its conservative investment philosophy, in market index funds, and in shunning hot products, marketing gimmicks, and the carpet-bombing approach to advertising so abundantly evident elsewhere in this industry today. Sometimes, it takes a lot of courage to stay the course when fickle taste is in the saddle, but we have stood by our conviction: In the long run, when there is a gap between perception and reality, it is only a matter of time until reality carries the day.
Fate Takes a Hand
Readiness, foresight, a sense of purpose, passion, the idea of the leader as servant, failure, determination, patience, and courage. Based on my experience, these are nine of the principal attributes essential to effective leadership. In the waning years of my career, fate was to dictate that I best draw on these attributes in a more personal sphere. To deal with a human failure (of a rather different kind—heart failure), I drew deeply on all of the patience, persistence, and courage that I could muster—as anyone would—when, in 1995-1996, I endured a 128-day hospital wait, on life-sustaining intravenous fluid, before receiving a heart transplant. No one could possibly imagine the renewed strength and the sheer joy that my (new) heart—my miraculous second chance at life—has given me! Part of that joy is in the extra years that miracle has given me to continue to lead—to further my intellectual pursuits in bringing common sense to mutual fund investing and the structure of the mutual fund industry, and my ethical pursuits to bring higher ideals of business management and organization to the corporate world.
TEN YEARS LATER
Leadership
My days as chairman and chief executive of Vanguard came to an end in 1996, and my stint as senior chairman concluded in 1999. Nonetheless, even with the passage of a decade, there is little that I can add to the lessons of leadership that I presented in the previous edition. My official management duties are now limited to my leadership of the Bogle Financial Markets Research Center, a Vanguard unit created as 2000 began. With a staff of four (including me), we do research on mutual funds, the securities markets, corporate America, the economy, and the financial system itself. Most of this research finds its way into the speeches that I continue to deliver (you’ll find all 400-plus of them posted on my eBlog—an anagram of Bogle—
www.johncbogle.com); the op-eds that I continue to pen (all told, more than a score, including two so far in 2009) for major publications; and the books that I write, now (including this new edition of
Common Sense on Mutual Funds) eight in number, with several more on the drawing board.
Even at age 80, I continue to press on in my crusade to build a better financial world for investors. My energy is high, and I feel a profound obligation to make the most of the extra years of life providentially given to me (so far) by the miraculous heart transplant I received 13-plus years ago. Of course, whether I like it or not, I’ve aged! But, as I said at the 2009 Morningstar Conference, while I’ve faced my share of serious health challenges in recent years, I simply don’t think it’s a very good idea for someone who’s been given 13 extra years of life to bitch (sorry about that, but it’s the word I used) about the petty challenges of human existence.
As I write in 2009, it occurs to me that the kinds of leadership that I alluded to in the final paragraph of the previous edition were almost prescient: intellectual leadership and ethical leadership. Of course those qualities call for a different kind of leadership than one would expect of a typical corporate leader or an investment leader. Nonetheless, I continue to believe that, even in those conventional categories, the best leaders will demonstrate a full measure of both intellectual and moral leadership. It can’t hurt!
During this past decade, the major form of intellectual and moral leadership that I’ve done my best to demonstrate is manifested in my books. (Yes, I write them myself, beginning with an ink-filled pen and a lined legal pad. Putting one’s name on someone else’s work doesn’t seem particularly ethical to me.) My first book, Bogle on Mutual Funds, was written in 1993. The first edition of this book was published in 1999, followed in 2001 by John Bogle on Investing: The First 50 Years (part of an (Continued) anticipated series on “Great Ideas in Finance”); Character Counts (an annotated collection of my speeches to our Vanguard crew) in 2003; The Battle for the Soul of Capitalism in 2005; The Little Book of Common Sense Investing in 2007; and Enough. True Measures of Money, Business, and Life in 2008.
I love writing! I love the English language. I love the research involved. I love editing (harshly!) my own text and I love (usually!) the reactions of the reviewers, the media, the bloggers, and (especially) the readers. No, they’ re not always kind and generous and supportive, and that tiny majority that doesn’t care for my work leaves me disappointed, even angry. (I’m only human!) But the overwhelming majority of readers gives each of my books pretty much the same high ratings. Some 300 reviews have been posted on Amazon, for example, with 90 percent of the reviewers giving them ratings of four stars or more, including 80 percent rating them at the five-star maximum. In all, some 800,000 of my books have been purchased, and—who knows?—perhaps one day the million-book mark will be crossed. The real reward for me, however, is not the delight in such remarkable acceptance (nor the royalties, which I direct to charity), but the fact that the intellectual and moral leadership I’ve strived to help develop among our citizens has found such a broad audience, not only in the United States but all across the globe.