To keep talented and honest people, mutual fund firms would be best advised to adopt a sort of "corporate culture," a Morningstar analyst attests.

Russel Kinnel, the company's director of mutual fund research, recalled the good deed of a Vanguard manager, who, against the request of an investor, refused to allow a $1 million market-timing transaction. Jack Bogle, then company president, was pleased that without even having to consult the Vanguard hierarchy, the manager did the right thing, which was to put the well-being of all shareholders first.

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