Bill McNabb was recently named chief executive of the Vanguard Group. (Bradley C. Bower/Bloomberg News)

The Vanguard Group touches hundreds of thousands — if not millions — of Washington area residents.

The mutual-fund giant, founded by index pioneer John C. Bogle in 1975 and located up the road near Philadelphia, manages $2 trillion for 25 million investors worldwide — many of whom are in our back yard (including employees of The Washington Post Co.).

In addition to running hundreds of retail and institutional mutual funds, Vanguard’s 13,500 employees perform numerous back-office functions, such as record-keeping and management of 401(k) and other retirement plans.

So people should care what Vanguard chief executive Bill McNabb has to say. Your retirement may be in his hands. Mine is.

McNabb is a member of the board of governors of the Investment Company Institute, the mutual-fund industry’s lobbying arm, which is based in Washington.

That’s where we sat down to talk about how he keeps the Vanguard ship — named for British Adm. Horatio Nelson’s flagship at the Battle of the Nile — steady as she goes. We also covered the importance of liberal arts, who gets the best company parking spaces and the merits of the Swiss army.

I cherry-picked parts of our discussion — including how he manages and what has formed his views on leadership — for this column. The rest, including his thoughts on the world economy, investment strategies and the nation’s fiscal state, will appear in our quarterly investment section on Oct. 3.

McNabb, 55, exudes sobriety and calm. That’s a good thing, because he took over for Jack Brennan in August 2008, a couple of weeks before Lehman Brothers went under. The Lehman debacle helped send the United States into its gravest financial crisis since the Great Depression. Vanguard’s assets under management for its U.S. clients went from about $1.3 trillion when McNabb took over to $964 billion when the stock market bottomed out in March 2009. The assets for U.S. clients have since more than doubled, to about $1.9 trillion.

He grew up Rochester, N.Y., majored in government and was on the rowing team at Dartmouth College. He taught high school Latin upon graduation and later earned an MBA from the University of Pennsylvania’s Wharton School before joining Vanguard in 1986.

The reason he joined Vanguard had a lot to do with an interview he had with then-Chief Financial Officer Jack Brennan, which McNabb vividly recalls.

“I said to him, ‘What are you trying to create here?’ ” McNabb said.

“He said we want a company with the intellectual rigor of Wall Street but Midwestern values. I was working on Wall Street at the time. I kind of smiled and said I kind of get exactly what you’re talking about.”

Those values start with a culture that promotes teamwork.

“A lot of this does come from my rowing background. When I was competing in college, we ran up against a few teams that, on paper, were way better than we were. One team, I remember very distinctly, was composed of eight or nine people who went to the Olympics.”

Dartmouth, however, “had guys like me. And I wasn’t going to the Olympics.”

But McNabb and his Dartmouth teammates bested the would-be Olympians.

“We beat ’em because . . . they were eight really strong individuals who maybe didn’t totally blend together as well as we did.

“It’s the old phrase, that gets overused, that the whole is greater than the sum of the parts.”

I wanted to know what got him there. How did someone from my neighborhood of the universe (I am from Syracuse, about 50 miles east of Rochester in Upstate New York) get to where he is?

“My parents stressed education a lot,” he said. “My dad really encouraged me. He was the first one in his family to go to college. And he really encouraged all of us to read and to be broadly educated. That’s where [my love] for the liberal arts came from.

“That helps form a little bit of how I think about things and the kind of people I’m drawn to. I actually have a bias toward people with liberal arts backrounds. My first job out of college was teaching Latin.”

Vanguard competes hard for top money managers, but it also likes to grow its executives organically. McNabb is looking for people who want to make Vanguard their life’s work.

“We want to be the destination for individual investors,” he said. “We want to be the place that people think ‘this is the firm that has my back.’

“We aren’t interested in people who just want to build their résumé.”

So how does he capture top financial whizzes when competing against firms such as like Goldman Sachs, JPMorgan Chase and the Carlyle Group, where people can earn tens if not hundreds of millions of dollars?

You can become a millionaire at Vanguard over the long term, but “nobody comes to us thinking that there’s going to be some big capital event. We’re not going to go public. There’s no monetization. We pay people well. We give them great benefits. We think we create an incredible environment to work. But by Wall Street standards, could you do better? Sure.”

He recalled a recent talk he gave to a class at Wharton, telling the students that they were smart and would make a good living.

Then somebody asked him what constitutes the key to success.

“Find something you are passionate about,” McNabb answered. “Something that gets you up every morning and that you believe in. And look for a match from a values perspective.”

Vanguard is famous for its investor-friendly, down-to-earth culture, which disdains pretense.

“It’s very meritocracy-driven. There’s not a lot of hierarchy . . . very little turf. It’s also very egalitarian. And I don’t mean socialist. People who perform the best move ahead.

“We don’t have superstars walking around. The money management group doesn’t have special parking spots or a special dining hall. The best parking spaces are for those who get there early.”

“Our view is to compensate what’s fair for whatever they’re doing, but don’t do it in indirect ways. Don’t do it with perks. Do it in cash. And make it based on the job.”

He then said something that reminded me of an oft-told story here at The Post, when the company’s executives — including the late chairman Katharine Graham — manned the telephones to take advertising orders when the newspaper was going through an especially difficult period.

“People understanding we’re all in it together is very important,” McNabb said. “Back when we were more telephone-dependent . . . when the phones started ringing and we didn’t have enough people in our phone group to answer them, we dropped what we were doing and we went and answered phone calls. We call it the Swiss army,” where every citizen of Switzerland is considered part of the army.

McNabb works hard to make his managers available, including holding town meetings of up to 300 to 400 as well as intimate gatherings around the tables.

“Our mangement team is very visible, very approachable and very down-to-earth. I give Jack Bogle a lot of credit for starting the company this way. And I give Jack Brennan a ton of credit for continuing it.

“My job is to just not screw that part of it up.”