Slippery People: Corporate Governance at Berkshire Hathaway

Slippery People: Corporate Governance at Berkshire Hathaway

Warren Buffet announced the sudden resignation of his heir apparent, David Sokol, on March 30, 2011. Berkshire Hathaway shareholders, fundamental style value investors, law professors, and the business media have been talking about it ever since. However, Buffett doesn't want us to question him further and is not willing to say anything more...

I have held back nothing in this statement. Therefore, if questioned about this matter in the future, I will simply refer the questioner back to this release.

The Berkshire Hathaway Annual Meeting is typically a marathon of openness and transparency. Buffet has been known to stay on stage at the revival-style event, this year scheduled for April 30, for up to eight hours. But Berkshire Hathaway has an Achilles heel. Buffett's storied forthcoming manner is not going to carry over to this case:

Alice Schroeder, author of  "The Snowball: Warren Buffett and the Business of Life": ORIGINALLY I didn't think Buffett was going to entertain questions on this subject at the meeting. I think he'll talk about it for maybe five or ten minutes in a statement at the beginning of the meeting, much of which time will be a recap of what happened. He could then cite litigation as a reason for why he can't have an open-ended discussion and take questions.

I've written several articles about this case because it fascinates me to see an iconic figure stumble. Call it schadenfreude. Or just call it my natural cynicism. Either way, I'm gratified that my first hunch - it's not a case of insider trading but one of an agent/fiduciary taking advantage of his trusted position to benefit himself first - has been ratified.

Read this article in its entirety at the re: The Auditors, a blog by Francine McKenna.