First of all, timing is everything, and my predecessor Jack Brennan likes to say I’m the worst market-timer in history. I like to say he’s the best market-timer in history. But in all seriousness, when the [financial] crisis began to really unfold, we had—I was new to the role and the team was—we were still working through that transition. But in a lot of ways, I think it solidified us as a team, because we had to work in a different way than the senior team had ever had to work before.
We were in crisis mode for essentially nine months. And the collaboration and the bonds that were forged during that period are something I’m going to remember for my whole life. And I actually think it led to us being stronger, both as a team, and that eventually translated into us being stronger as a company.
I think anytime you go through a crisis—and 2008 was certainly the most significant crisis we’ve gone through—organizations have an opportunity to rise or fall. And what Vanguard did was step up on behalf of clients. Frankly, we stepped up on behalf of the crew as well, and we emerged from the crisis actually a much stronger company.
One of the things that went on as a result of the crisis is once we had navigated the immediate situation, we actually stepped back and said, with all of the things that we now know, and the then coming regulation, and so forth, how’s the world going to be different? And what do we need to do as an organization to be different?
So in a lot of ways, we were able to take all of the change that was occurring because of the crisis, and actually reshape and refocus our energies, so that we were a stronger company. We’re here to take a stand for investors, treat them fairly, and ensure that they have the best chance for success. I think that’s actually the most succinct way of describing what we are. But if you think about it, our structure really determined an awful lot for us.
And the fact that the funds own Vanguard, and the investors in the funds, therefore, through the funds own Vanguard, has driven everything that we’ve done. Jack Bogle once gave a famous speech where he said strategy follows structure. I actually think that’s correct.
We’re owned by the funds, and therefore, the investors in the funds own Vanguard. We’re the only investment firm in the world that’s structured this way. That client-centricity drives everything. One could argue, everything we’ve done strategically is because of that structure. And if you think about the decisions we make, it’s always what’s in the best interest of our client-owners. And that’s really a result of our structure.
So, when I look back on the last 40 years, every key decision we’ve made has really been centered around the fact that we’re owned by the investors, as opposed to a publicly traded company—the way a publicly traded company is owned, or a private partnership, or whatever.
And that client ownership structure is the single most distinguishing characteristic of Vanguard. You can never take your eye off what’s the heart and soul of this company, which is making sure that we’re there for the investor.