Berkshire Hathaway 2010 Annual Report Download - page 107

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Somebody 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 that number
getting through the day without any bad behavior 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 behavior 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 acquisitions.
************
I need your help in respect to the question of succession. I’m not looking for any of you to retire
and I hope you all live to 100. (In Charlie’s case, 110.) But just in case you don’t, please send me a letter
(at home if you wish) giving your recommendation as who should take over tomorrow if you should
become incapacitated overnight. These letters will be seen by no one but me unless I’m no longer CEO, in
which case my successor will need the information. Please summarize the strengths and weaknesses of
your primary candidate as well as any possible alternates you may wish to include. Most of you have
participated in this exercise in the past and others have offered your ideas verbally. However, it’s
important to me to get a periodic update, and now that we have added so many businesses, I need to have
your thoughts in writing rather than trying to carry them around in my memory. Of course, there are a few
operations that are run by two or more of you – such as the Blumkins, the Merschmans, the pair at Applied
Underwriters, etc. – and in these cases, just forget about this item. Your note can be short, informal,
handwritten, etc. Just mark it “Personal for Warren.”
Thanks for your help on all of this. And thanks for the way you run your businesses. You make
my job easy.
WEB/db
P.S. Another minor request: Please turn down all proposals for me to speak, make contributions, intercede
with the Gates Foundation, etc. Sometimes these requests for you to act as intermediary will be
accompanied by “It can’t hurt to ask.” It will be easier for both of us if you just say “no.” As an added
favor, don’t suggest that they instead write or call me. Multiply 76 businesses by the periodic “I think he’ll
be interested in this one” and you can understand why it is better to say no firmly and immediately.
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