of the market and to focus on making decisions that favour long-term stewardship – another idea Buffett likes. That means committing to support investments that grow steadily in value over time.
Success is measured by a strong recurring cash flow, and an organisation with solid values where employees at all levels do the ‘right thing'. Where mistakes have been made Buffett accepts personal responsibility. If it goes wrong it’s generally not the fault of management as he sees it, but his misjudgement
on the competitive position of an acquired company.
On Board philosophy he invokes directors to think like owners. The main task of the Board; and here he is forceful, is to hire the right CEO avoiding mediocre leaders. Compensation packages for senior executives should lean to being “low” but with a high “stake” in the upside value. He lavishes praise on Berkshire managers who are revered via a song in the company annual video.
But one unanswered question is the Berkshire CEO succession plan; Buffett, 81, is still firmly in the driving seat and is expected to keep going for some time to come. He won’t comment publicly on who the Board might have earmarked to be his successor. But the media speculates that one of his divisional managers Ajit Jain, 60, who has made billions for Berkshire building its reinsurance business is Buffett’s heir apparent. But with applause ringing to the answers Buffett gives to the questions from the floor– he is still clearly loved by shareholders- and deserves to be!
