•You will hear an interview with John J. Brennan, Chairman and CEO of the Vanguard Group. •For each question 23-30, mark one let

How would you define your client base?
We think of ourselves as having three important client segments: First is the everyday investors with the resources on hand to invest with Vanguard, who might be just starting out with an IRA, for example. The second type of client is the affluent individual who owns multiple funds and may seek advice services from us. And the third, a very important client segment is corporations, winch range from small to large, domestic and international companies. We provide corporations with investment-management services, while also serving as the manager of their employee-retirement plans.
So, when you look at Vanguard’s overall client base, we are, in a very real sense, Americans from recent college graduates starting their first day on the job to people with large amounts of accumulated wealth to sophisticated pension-fund managers.
How have your services evolved over the years, and will they remain relatively consistent?
They’ve evolved quite a bit. In fact, one of the core principles we live by internally is that we have to adapt, evolve, and continuously improve. That’s something we believe innately and preach to our new "crew members", our term for employees. Our largest asset, of course, is our extremely loyal client base. So, while we never stray from our core mission of increasing our clients’ wealth and meeting their objectives, we continuously adapt and evolve by enhancing our services.
Speaking of moving forward, how has the economic downturn affected Vanguard’s business? And what’s your prediction for the near future?
Our business is so dependent on market psychology that, in some ways, we don’t directly correlate with the economy. But what we’ve seen over the past six months is confidence, and it’s confidence at the corporate level. When we meet with corporate clients, they feel better about their ability to invest and their prospects moving forward. That impacts both the market and our business. On the retail side of the house, we believe that there’s a great deal more confidence in the economy, the worst of the recession is behind us, and that the future looks bright.
Financial products often look similar from company to company. How do you differentiate Vanguard?
That’s always difficult because we have a lot of great competition, but Vanguard has a few compelling attributes, which we feel set us apart. For one, we’re owned by our clients. We have a single master: the clients. We don’t have public shareholders; there’s no parent company. So, 100 percent of our energy and attention is devoted to the clients.
The second key attribute is value. We live to a simple mission statement: to be the world’s highest-value provider of investment services. So, every judgment we make about a service or product is geared toward making it the best one available. Also, value is a combination of performance which is critically important in the investment business -- service duality, and cost. We emphasize these three elements of value continually.
And third, we’re disciplined. There are a lot of things we just won’t do, such as compete outside our sphere of expertise. Other companies, recognizing that this is a highly competitive marketplace, will try to co-opt your space with marketing, as opposed to substance. Our view is that we’ll let substance define our position in the market, instead of spending a lot of our clients’ money to do that.
Do you focus primarily on North America?
Investment management is an increasingly global business for us. We’ve been in the global marketplace for about seven years, and a growing share of our cash flow is coming from international investors. Growth opportunities in the United States remain considerable for us, but we’re also fully committed to enlarging our footprint in the Pacific, South America, and Europe in particular.
There’s no doubt that corporate governance scandals have affected the public’s view of the corporate world. How much does this concern you?
I’m very optimistic it will improve. This has been a tough period to be a corporate executive and an investor, but I think we’ve seen the bottom with regard to the public image of corporate executives. And leading organizations have changed their governance structure and their leaders when necessary.
In the future I believe there will be a premium paid for reputation. There always has been one, but it will be higher for those companies that can ensure that their accounting practices and governance are superior, and that their leadership is fully committed to ethics and integrity.
What advice would you offer young people who’d like to follow in your footsteps?
The first thing to do is to look for a value match: What’s important to an organization, and what’s important to you? Value sets that match are the most important contributor to job satisfaction which, in turn, leads to job success, in my view.
I also encourage people to be adventuresome. Every experience you have interacting with clients, dealing with internal issues, working in finance, marketing, and so on, builds you as an individual as you move through your career. Therefore, if you’re part of an organization you think very highly of and you’re asked to take on an assignment, do it. A quality organization will spend a huge amount of time to make you successful. To constrain your potential by being too narrowly focused is a huge mistake, and yet it’s one I see people make frequently.
You seem so genuinely at ease and content with your career, even though the job must often be very stressful. How do you remain so positive and even tempered?
My philosophy is that there’s never a bad day. I love the minute-by-minute activity. However, leaders have to raise themselves above the minute-by-minute operations without swinging too high or too low, which would send a bad signal to the people they work with. You want passion but also poise at the top of an organization. Maybe that should be a requirement to be a CEO with some tenure. Volatility isn’t an asset. We don’t want volatile leaders here, and, frankly, we don’t much respect volatile characters elsewhere.