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Character Counts

If character counts—and I have absolutely no doubt that character does count—the ethical failings of today’s business and financial model, the financial manipulation of corporate America, the willingness of those of us in the field of investment management to accept practices that we know are wrong, the conformity that keeps us silent, and the selfishness that lets our greed overwhelm our reason all erode the character we will require in the years ahead, more than ever in the wake of this great bear market and the investor disenchantment it reflects. The motivations of those who seek the rewards of commerce and finance struck no less a man than Adam Smith as “something grand and beautiful and noble, well worth the toil and anxiety.” It is high time we can earn the right again to apply those words to our business and financial leaders—and mean them.

In his first press conference after his nomination to serve as chairman of the U.S. Securities and Exchange Commission, Wall Street veteran William H. Donaldson described his highest priority. It was, he said, “to restore the confidence of investors in the integrity of the financial markets.”

With respect, I believe he was wrong. His highest priority should be “to restore the integrity of the financial markets.” Once that task is accomplished—insofar as it ever can be accomplished—investor confidence will automatically follow.

John C. Bogle
March 1, 2003
Valley Forge, Pennsylvania

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