Professional Enterprises

By Ramesh Akkineni
from a speech by John Bogle
In a 1971 speech to our management group, I sounded the alarm: "All things considered, it is undesirable for professional enterprises to have public stockholders. This constraint is as applicable to money managers as it is to doctors, or lawyers, or accountants, or architects. In their cases, as in ours (i.e., Wellington's), it is hard to see what unique contribution public investors bring to the enterprise. They do not (contribute) capital; they do not add expertise; they do not enhance the well-being of our clients . . . Indeed, it is possible to envision circumstances in which the pressure for earnings and earnings growth engendered by public ownership is antithetical to the responsible operation of a professional organization and . . . to the exercise of our fiduciary duty."

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