The priority is that all of us continue to zealously guard Berkshire's reputation. We can't be perfect but we can try to be. As i've said in these memos for more than 25 years: "We can afford to lose money - even a lot of money. But we can't afford to lose reputation - even a shred of reputation." We must continue to measure every act against not only what is legal but also what we would be happy to have written about on the front page of a national newspaper in an article written by an unfriendly but intelligent reporter.
Sometimes your associates will say "Everybody else is doing it." It is totally unacceptable when evaluating a moral decision. Whenever somebody offers that phrase as a rationale, in effect they are saying that they can't come up with a *good* reason. If anyone gives this explanation, tell them to try using it with a reporter or a judge and see how far it gets them.
If you see anything whose propriety or legality causes you to hesitate, be sure to give me a call. However it's very likely that if a given course of action evokes such hesitation, it's too close to the line and should be abandoned. There's plenty of money to be made in the centre of the court. If it's questionable whether some action is close to the line, just assume it is outside and forget it.
As a corollary, let me know promptly if there's any significant bad news. I can handle bad news but I don't like to deal with it after it has festered for awhile. A reluctance to face up immediately to bad news is what turned a problem at Salomon from one that could have been easily disposed of into one that almost caused the demise of a firm with 8,000 employees.
Someone is doing something today at Berkshire that you and I would be unhappy about if we knew of it. That's inevitable: We now employ more than 250,000 people and the chances of the number getting through the day without any bad behaviour occurring is nil. But we can have a huge effect in minimizing such activities by jumping on anything immediately when there is the slightest odor of impropriety. Your attitude on such matters, expressed by behaviour as well as words, will be the most important factor in how the culture of your business develops. Culture, more than rule books, determines how an organization behaves.
In other respects, talk to me about what is going on as little or as much as you wish. Each of you does a first-class job of running your operation with your own individual style and you don't need me to help. The only items you need to clear with me are any changes in post-retirement benefits and any unusually large capital expenditures or acquisition.
From: Warren E. Buffet
To: Berkshire Hathaway Managers ("The All-Stars")
cc: Berkshire Directors
Date: July 26, 2010
Comments
Post a Comment