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Collection: Warren Buffett - #243 'Berkshire Hathaway After Warren Buffett'



Tom Harrison (PH) from Claremore, Oklahoma. Good afternoon, gentlemen. And thanks for a wonderful weekend.

This question’s for Mr. Buffett. Being somewhat pessimistic by nature, I have a recurrent nightmare of a Wall Street Journal headline proclaiming, “Buffett kicks bucket.”


They may phrase it a little more elegantly than that — (Laughter) — but someday, the headline will be there. (Laughter)


And, of course, Charlie’s no spring chicken either. (Laughter)

In light of these concerns, could you please go into a little more detail than that presented in your annual report regarding the succession issue? And my apologies for the morbid nature of the question.


Oh, there’s no reason to apologize. I mean, it’s a question I ask our managers, incidentally, every couple of years.

I — about every two years, I send them a letter and I say, you know, “If you die tonight, what will you — what will I wish you had told me tomorrow morning?” You know, because I have to make that same decision and I’m not conversing with them every night.

So I want them to put in writing to me, once every couple of years, what they think about the subject, who they think should succeed them, or whether there are several candidates, or what the strengths and weaknesses are. And I have that information available.

And, you know, you’re entitled to the same sort of answer about succession. It’s a part of buying into this business.

And it — I can tell you that no one has more of an interest in it than I do. And Charlie has a similar interest, because, we have a very high percentage of our net worth in the business.

Plus, we’ve got a lifetime of effort in the business. And we want it to succeed for both, in our cases probably, at least my case, the ultimate reward, the foundation I have.

But also because we just want — we like what’s happened so far and we want to prove that it can — it’s not dependent upon a couple of guys like us, but that it can be institutionalized, in effect.

And we have, and Charlie and I, we know who will succeed me in what are likely to be two jobs, one marketable securities and one business operations.

We want to be very sure that the culture is maintained. And I think it’s so strong that I think it’d be very hard to change it.

But in addition, the stock ownership situation with me is such that it can — if there were any inclination to change it, it can be prevented from happening. I don’t think it would, anyway.

Now, in terms of who succeeds me, that depends when I die. I — and there’s no sense telling you who it would be today. There’d be no plus to that, and it might not be the same 20 years from now.

I mean, 20 years ago, it would’ve been Charlie, obviously. But it won’t be Charlie now because of his age. And it’ll be somebody else.

But 20 years from now or 15 years from now it might be some third party. But we’ve got —we feel very good about the succession situation.

We feel very good about the stability of the organization, in terms of the stock ownership situation, because that is insured for a very, very long time to come. We couldn’t feel better about the managers we have in place and the culture we have in place. And, you know, the individual will be named.

I think I’ve mentioned, though, that when they open that envelope — all of the contents of that envelope are already known to the key people — but when they open that envelope, the first instruction is, you know, take my pulse again. (Laughter)

But if I flunk that test, there will be somebody very good in place.



The main defense, of course, is to have assets that will do well, more or less, automatically. And we have a lot of those.

And to the extent you improve that further by having very good managers in place and very good individualized systems for bringing new managers into the places, there’s a lot of momentum here that would go on very nicely with the present management gone.

And now, I don’t think our successors are going to be as good as Warren at actually allocating the money. (Applause and Laughter)


No, we ran a little test case 10 years ago because for nine months and four days, I took another job at Salomon. And things went fine at Berkshire.

We’ve got — the managers don’t need me. We have to allocate capital. We have to make sure they’re treated fairly. And —

But we are not making decisions around the place, except in the allocation of capital. And that will be important. But some of that is semiautomatic. And others, you know, it does require, you know, some imagination sometime or something of the sort.

But for nine months and four days in 1991, you know, Salomon was primarily on my mind and Berkshire wasn’t. And everything went on just as before. And we are far, far, far stronger now than we were 10 years ago.

So I’m very comfortable with 99 percent of my estate being in Berkshire shares. And I think it’s an intelligent holding, eventually, for the foundation. And knowing that, you know, I won’t be around at some point before the foundation gets it.

OK, area 8.

~ Please visit the site above for full video of Berkshire Hathaway Annual Meeting.


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