Jack Bogle on Exceptional Employees and Differences of Opinion

John C. Bogle is the founder and retired CEO of The Vanguard Group, the largest mutual-fund organization in the world, with more than 160 mutual funds and current assets totaling more than $1.4 trillion. Since his retirement from Vanguard in 1996, Bogle has spent his time studying, writing, and speaking on the financial markets and mutual funds. He is president of the Bogle Financial Markets Research Center, created in 2000 to support his ongoing work on behalf of investors.

In this video segment, Bogle recalls time spent with Vanguard's Award for Excellence winners as some of the most engaging and pleasant of his career. Since he left the firm, his views have not always aligned with Vanguard's.

Tom Gardner: There's a Gallup survey that shows that seven out of 10 people going to work in America today basically say they're indifferent or even downright negative about the organization they're working for.

In a funny way, in that rowboat scenario, where we're all rowing together ... in many organizations, more than half of the people don't even really care about what they're doing. Obviously you've found people who are passionate about the principles.

Jack Bogle: We have more turnover than I would like, but that happens at these middle-grade job levels. Our people are well paid. They've got terrific benefits with partnership plans. They share in the earnings we generate for shareholders.

I still spend an hour with each Award for Excellence winner -- the program I put in there all those years ago -- and there are probably about eight per quarter, so I get to sit down and talk to eight people a quarter. It may not sound like much in an organization that big -- 32 a year, 320 in 10 years, 640 in 20 years.

Now these are exceptional people. That's why they got the Award for Excellence, so I'm not kidding myself. But we have human conversations, talk about commitment, talk about opportunity, talk about the lack of opportunity. Talk about anything they want to talk about. They're among the most engaging and pleasant moments of my career.

Gardner: You're in the unique position of having started the company, run the company, and now sit as an observer of your creation. Succession is such a big issue for so many. We have a lot of small-business owners that are at The Motley Fool and thinking about that. What have you learned, or what do you think about?

I find it to be a great thing that you have minor "lovers' quarrels" with things that are happening at the company that you created -- which I think must be intellectually stimulating for you, and the organization. How is that experience for you?

Bogle: It's difficult. Let me be honest about it, it's difficult. The company is not particularly smitten with my directness and outspokenness, and my books.

People don't like criticism, generally speaking, but I'm just trying to tell it the way I see it. I'd say my book, The Clash of the Cultures, almost entirely reads like a great big commercial for Vanguard. There's some things they don't like in there -- talking about the Wellington Fund fee increase, which I believe was unjustified, talking about our proxy voting policies, talking about the possibility of having a transaction tax -- and a bunch of other things that are similar to that.

I finally had to develop a response, when someone says, "I understand you disagree with Vanguard on that point."

I say, "Absolutely not. I would never disagree with Vanguard. Vanguard disagrees with me, and it's their right."