Two weeks ago, John Bogle, founder of the Vanguard Group, suggested that index fund companies form a federation aimed at pressuring corporations to better-serve their shareholders. But industry observers said the idea is more symbolic rhetoric than a substantive call to arms.

Bogle said during a speech to the New York Society of Security Analysts that the top index fund companies control as much as 10% of all outstanding U.S. corporate stock. So the firms stand a chance of stamping out poor corporate practices, such as overly inflated executive compensation and shoddy financial reporting, by voting down bad ideas and pressuring companies to fire bad managers, he said.

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