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I voted with the Berkshire Board on all recommendations with the exception of electing Howard G. Buffett and Susan A. Buffett to the board.

In my mind they do not qualify based on the criteria that Mr. Buffett has put forth over the years for Berkshire Board members.

https://www.youtube.com/watch?v=nVWDUOi44OI

At minimum, how will Howie and Susie be able to provide input into Berkshire's future capital deployment decisions? Seems that will become an important role of the board once Warren and Charlie have passed.

My vote, and your vote, won't make a difference but maybe Mr. Buffett will see that some folks don't agree with what is obvious nepotism.

Thanks for the reminder I voted against the offspring as well.

Warren has some quirks. This is an obvious one

My vote, and your vote, won't make a difference but maybe Mr. Buffett will see that some folks don't agree with what is obvious nepotism.

Not everyone on a board should have the same qualifications nor the same talents. If that was the goal, why bother with having more than one person?

While not taking a stand on nepotism (I'm generally against it) there is something to be said for 'culture' and maintaining a productive company against those who would come in and strip it for parts (see: Eddie Lambert). I view these two as a step in that direction. I may be wrong, or they may not be successful, but two on a board of 14 does not seem unholy.

That Warren has espoused other things over an extended career doesn't surprise me either. Over 70 years I have probably said things that I would disagree with or modify now.

Is there a place where we can see the actual vote totals per director?

"Not everyone on a board should have the same qualifications nor the same talents. If that was the goal, why bother with having more than one person?"

Which of Howie and Susie's qualifications do you think Berkshire will benefit from?

From the 2023 Proxy:

https://www.proxydocs.com/branding/963708/2023/iss...

HOWARD G. BUFFETT, age 68, has been a director of the Corporation since 1993. Since 1999, Mr. Buffett has been the Chairman and Chief Executive Officer of the Howard G. Buffett Foundation, a charitable foundation that directs funding for humanitarian and conservation related issues. Mr. Buffett also serves on the boards of several other charitable organizations. Mr. Buffett was the Sheriff of Macon County, Illinois between September 2017 and December 2018. He was a director of The Coca-Cola Company from December 2010 until April 2017.

Additional Qualifications:
Howard Buffett brings to the Board his experience as the owner of a small business, as a past senior executive of a public corporation, as a former director of other public corporations and as the Chairman and CEO of a large charitable foundation.

SUSAN A. BUFFETT, age 69, was elected a director of the Corporation on October 20, 2021. For more than the past five years, she has been the Chairman of The Sherwood Foundation and the Chairman of The Susan Thompson Buffett Foundation, each of which is a private grant-making foundation based in Omaha, NE. Ms. Buffett also serves on the boards of several other charitable organizations.

Additional Qualifications:
Susan Buffett brings to the Board her experience as the board chair of two large charitable foundations and as a board member of several other charitable organizations.

"That Warren has espoused other things over an extended career doesn't surprise me either. Over 70 years I have probably said things that I would disagree with or modify now."

Here Berkshire's current board qualification criteria:

"In choosing directors, the Company seeks individuals who have very high integrity, business savvy, owner-oriented attitude, a genuine interest in the Company and a significant investment in Berkshire shares relative to their resources for at least three years. The Company is required to elect a majority of directors who are independent."

https://www.berkshirehathaway.com/govern/corpgov.p...

You may disagree but I don't see Howie and Susie having either "business savvy" or "independence".

If I remember correctly , they were placed by WB to protect and continue the culture he established. WEB established. Long term holders are surely cognizant of this.H and S not there for the Xs and Os.

"If I remember correctly , they were placed by WB to protect and continue the culture he established."

as Munger said: "greg will protect the culture"

<...there is something to be said for 'culture' and maintaining a productive company against those
who would come in and strip it for parts (see: Eddie Lambert). I view these two as a step in that direction.
I may be wrong, or they may not be successful, but two on a board of 14 does not seem unholy.>

Agree 100! It's about that Buffett culture. I want a little bit of that Buffett DNA on the board.

Warren has said that Howard and Susie both understand the company's distinctive culture and are invested in its long-term success.
I concur, who better to protect and maintain their Dad's legacy?

Larry Cunningham says, 'Susie obviously knows Berkshire better than anyone and spends way more time with him than anyone else,
even his wife, and knows the culture and the do's and don'ts, and she is also tough. When he leaves, we know there won't be
exceptions or exemptions or waivers around core principles. She will speak up for that.'

Lastly, I do find it remarkable how every decision the greatest financial mind in the history makes is questioned endlessly...such is life!

Carpe Diem Shrewds!

"they were placed by WB to protect and continue the culture he established."

Maybe someone can elaborate specifically how Howie and Susie will both serve to maintain the Berkshire "culture", with both of them having at best only a nominal understanding of capital allocation and how to run a business.

Maybe I'm underestimating their abilities. Please correct em if I am wrong.

One can gain plenty of business savvy from running nonprofits or serving on their boards. Not to mention, from observing and speaking to Warren Buffett and his business colleagues on a regular basis for decades.

Which of Howie and Susie's qualifications do you think Berkshire will benefit from?

What one of my co-workers used to call 'dinner table education.' Perhaps like Henry Ford II (or even Edsel) who were better at business, if not inventing, than their father. Or Rupert Murdoch who inherited a small media empire and turned it into a Goliath. (See also: Ted Turner.) Majorie Post took her father's cute little cereal company and turned it into General Foods. Not quite the same, but Harry Reese learned the candy business from Milton Hershey, and Reese's Cups now outsell every other candy bar made. Gilbert Swanson learned the turkey business from his father and made it 1000 times bigger. Cornelius Vanderbilt learned shipping at his father's knee. Or'

Maybe someone can elaborate specifically how Howie and Susie will both serve to maintain the Berkshire 'culture' with both of them having at best only a nominal understanding of capital allocation and how to run a business'.

Sure. In the same way boards are often populated by members without specific industry knowledge, but who have qualifications in other area. Some may have tax expertise, some have government connections, others on (for instance) gaming startups may simply be networked to venture capitalists but have no idea how to write code. Buffett family members on the board may serve in the way I have already described: to keep short term thinkers at remove, and that is an asset in and of itself.

PS: some of the latest T&T moves have been exceptionally short term, not that there's anything wrong with that occasionally. But to think every board member must know 'capital allocation' is to misunderstand what a board is and does.

My gut feeling is that Susan alone probably should have been a board member. I have doubts about Howard.

'It's about that Buffett culture. I want a little bit of that Buffett DNA on the board.

Warren has said that Howard and Susie both understand the company's distinctive culture and are invested in its long-term success.
I concur, who better to protect and maintain their Dad's legacy?

Larry Cunningham says, 'Susie obviously knows Berkshire better than anyone and spends way more time with him than anyone else,
even his wife, and knows the culture and the do's and don'ts, and she is also tough. When he leaves, we know there won't be
exceptions or exemptions or waivers around core principles. She will speak up for that.''

I do respect other opinions, yet I agree with the above. If Warren feels that having two senior-aged children on the Board of 15 is best for Berkshire and to help ensure the culture will be honored and maintained, I support his decision. He has earned that trust imo. I imagine their role and any influence on capital allocation and manager compensation, etc. would be very limited.

Found this clip from the 1995 meeting on family and Board membership:

https://m.youtube.com/watch?v=qLO0Z3r3KNI

Here are some of WEB's related comments from the 1993 letter:

'When my stock is transferred to either my wife or the
foundation, Berkshire will enter the third governance mode, going forward with a vitally interested, but non-management, owner and with a management that must perform for that owner. In preparation for that time, Susie was elected to the board a few years ago, and in 1993 our son, Howard, joined the board. These family members will not be managers of the company in the future, but they will represent the controlling interest should anything happen to me.
Most of our other directors are also significant owners of Berkshire stock, and each has a strong owner-orientation. All in all, we're prepared for "the truck."

One thought:

'Lose money for the firm, and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless.'

The offspring may be just fine (by coincidence), or may not be, but maybe that isn't the biggest issue.
As others noted, 2 out of 14 isn't likely to sink the ship.
Either way, that's like gaining or losing a little money.

But there is no conceivable way to spin it as their bringing relevant skills, *even if* that purported skill is "protecting the culture".
They are there because they're the kids of the boss, period, and everybody knows it.

It is a massive ongoing blight on the reputation of the firm.
If our company's boss had a boss, that over-boss would come down ruthlessly.

Oddly enough, the one situation that would have changed my mind is if Mr B were leaving his stock to them.
They'd be major shareholders, and having a seat at the table would be pretty reasonable.

Jim

Oddly enough, the one situation that would have changed my mind is if Mr B were leaving his stock to them.
They'd be major shareholders, and having a seat at the table would be pretty reasonable.

My (maybe very wrong) understanding is that Howie will control the voting power of Warren's stock holdings until they ultimately disappear in time into charitable contributions.

IF this is true, then he will hold voting control for some time - particularly with Susie's and other long term shareholders backing.

I'm not claiming this is the situation. But I would be grateful for anyone who can clarify what happens to Buffett's stock voting powers upon his passing.

My (maybe very wrong) understanding is that Howie will control the voting power of Warren's stock holdings until they ultimately disappear in time into charitable contributions.

On that subject - when Warren's stock holdings are charitably contributed at some point after his passing, what is the likelihood that the shares will be sold in large volumes over a relatively short period of time?

If this occurred, and given how large his stake is in Berkshire, I would expect a massive liquidation of shares to have a significant downward pressure Berkshire stock prices. But I wonder how long the effects of that could persist.

I find the arguments advanced for the Buffett kids being needed to the "keep the culture" or the "Buffett DNA" quite unspecific, wishy-washy and generic.

The point remains that their biographies do not show any evidence of impressive independent business skills to date.
The Berkshire culture if anything is one of extremely rational and objective capital allocation. Just as Buffett didn't need Ben Graham's progeny beside him to build a successful record based on his principles, rational operation of Berkshire does not need his descendants to operate successfully.

There is no evidence that either of the two kids have any skills in capital allocation or corporate governance. Their entire career recrods are almost completely due to Buffett's capital backing them in projects which they would have struggled to kick-start independently. Good luck to them, but that does not entitle them to a board seat.

A plausible scenario that the board may need to be actively involved in when a future CEO embarks on a vanity acquisition of substantial size as this tends to be a tendency that is somewhat common. Nothing in the kids' records or experience suggests they have any skills, gravitas or credibility in shooting down a follhardy escapade like that should it happen in the future.

Cunningham's argument about Susie "understanding Berkshire culture" is a shockingly low bar for a board seat of a major company in my opinion.

<<Cunningham's argument about Susie "understanding Berkshire culture" is a shockingly low bar for a board seat of a major company in my opinion.>>

That is a shockingly low bar, it's also not what he said. It's what you said.

Larry Cunningham actually said, "Susie obviously knows Berkshire better than anyone and spends way more time with him than anyone else,
even his wife, and knows the culture and the do's and don'ts, and she is also tough. When he leaves, we know there won't be
exceptions or exemptions or waivers around core principles. She will speak up for that."

"She understands Berkshire better than anyone, spends more time with Warren than anyone and she's tough..."

That's someone I want on my board. Perhaps you don't, I'll vote my shares you vote yours. Different viewpoints make the world interesting!

BTW If you don't know, Lawrence A. Cunningham is a lawyer, professor, corporate advisor, and author.
Cunningham is best known as an expert on corporate governance. He is also known for his knowledge of the history and corporate culture of Berkshire Hathaway and Warren Buffett. (Now you know.)

Warren has said, "Howard and Susie both understand the company's distinctive culture and are invested in its long-term success."

Have a great day all! Go get your Shrewd on!

On that subject - when Warren's stock holdings are charitably contributed at some point after his passing, what is the likelihood that the shares will be sold in large volumes over a relatively short period of time?

If this occurred, and given how large his stake is in Berkshire, I would expect a massive liquidation of shares to have a significant downward pressure Berkshire stock prices. But I wonder how long the effects of that could persist.

Here is what Buffett said in the 2019 letter to shareholders:

"Today, my will specifically directs its executors ' as well as the trustees who will succeed them in administering my estate after the will is closed ' not to sell any Berkshire shares. My will also absolves both the executors and the trustees from liability for maintaining what obviously will be an extreme concentration of assets.

The will goes on to instruct the executors ' and, in time, the trustees ' to each year convert a portion of my A shares into B shares and then distribute the Bs to various foundations. Those foundations will be required to deploy their grants promptly. In all, I estimate that it will take 12 to 15 years for the entirety of the Berkshire shares I hold at my death to move into the market."

https://berkshirehathaway.com/letters/2019ltr.pdf

Similar distributions have been going on for quite some time with Buffett's annual donations to the Gates Foundation. The Gates Foundation has been selling 5M or more B shares per quarter in many, if not most, quarters for more than a decade. See https://www.dataroma.com/m/m_activity.php?m=GFT&ty....

So, I don't worry too much about a "massive liquidation of shares" after Buffett passes.

<i<Larry Cunningham actually said, "Susie obviously knows Berkshire better than anyone and spends way more time with him than anyone else,
even his wife, and knows the culture and the do's and don'ts, and she is also tough. When he leaves, we know there won't be
exceptions or exemptions or waivers around core principles. She will speak up for that."

"She understands Berkshire better than anyone, spends more time with Warren than anyone and she's tough..."

That's someone I want on my board. Perhaps you don't, I'll vote my shares you vote yours. Different viewpoints make the world interesting!


Fair enough. I see no reason to subcontract my opinion to Lawrence Cunningham. All he is saying is that Buffett's daughter is qualified because she has spent a lot of time with him. I find the argument unpersuasive to say the least. In addition his comments do not cover Howard Buffett.

The wider point is about Buffett kids being shuffled in to board seats with unexeptional qualifications.

I am very familiar with Larry Cunningham and his books on Buffett and quality shareholders by the way and he is actually on the board of Constellation Software, which I have a holding in as well.
I generally feel his research is worth reading and he makes good points.

As he is not a member of the Berkshire board, nor a substantial Berkshire shareholder or particularly personally close to Buffett, I am not that influenced by his subjective opinion of a person who I'm not even sure he has ever worked personally with.

After reading this long thread on the qualifications for serving on Berkshire's BOD, I have a question.

Do you scrutinize BOD candidates for all the companies you invest in as carefully as you do BRK's or is BRK an exception?

I suspect more than half the BOD candidates of most companies would not qualify on the criteria advocated. Of course most companies don't have any unique culture that needs to be preserved.

And it is not unusual for descendants of founders to be on the BOD, due to significant shareholding.

For all companies I am invested in, the only proposal I always vote against management's recommendation is share-based compensation.

<Do you scrutinize BOD candidates for all the companies you invest in as carefully as you do BRK's or is BRK an exception?
I suspect more than half the BOD candidates of most companies would not qualify on the criteria advocated.
Of course most companies don't have any unique culture that needs to be preserved.
And it is not unusual for descendants of founders to be on the BOD, due to significant shareholding.>

Superb questions!
I was thinking this as well.
I'd be willing to bet most of the posters here who are hating on Susie have no idea who's on the boards of the other companies they own, or their qualifications. (Or lack thereof.)
Yet they hold Warren (The one guy you can actually trust to do what's best for shareholders) to a different standard.
Strange...

All the best!

I'm actually more disappointed with the recent additions of Wally Weitz and Chris Davis than another Buffett progeny to the BOD. With Buffet progeny I at least feel I know why they are there. Including Meryl Witmer, there are now three professional money managers on the BOD, and don't know what diversity of talent or experience they bring.

I would have preferred someone with more experience running big global corporation like Indira Nooyi. With Bill Gates's departure, maybe someone with background in software, internet etc. Someone like Jeff Bezos, Tim Cook or Morris Chang.

Do you scrutinize BOD candidates for all the companies you invest in as carefully as you do BRK's or is BRK an exception?

Good question and yes I try to when looking at the proxy statement which is after all the topic and reason for this discussion.
Berkshire is also different due to :
- The position size and exposure some of us have which is different to other positions.
- The certainty of change, in the very near future, where current allocation and policy transitions from being driven by two very competent, independent individuals with a long track record and conviction. This very unique combination of individuals currently assures robust debate and criticism being offered and acted upon. This model will soon need to shift to a competent ceo in Abel, no Munger and then robust challenge to the ceo (where necessary) can only come from the board. That is why the future board needs to be stronger than it has been so far. In fact so far, you could have put anyone on the board as long as Warren Buffett was both CEO and Chairman. The company would have run just as well. Obviously this no longer going to be the case in the future.

A board packed with family appointees and a lead director with a lower position size than mine after many years of membership is not a particularly positive sign for me.

"A board packed with family appointees and a lead director with a lower position size than mine after many years of membership is not a particularly positive sign for me."

Amen. I own more than many of them.

Hopefully that changes.

"A board packed with family appointees and a lead director with a lower position size than mine after many years of membership is not a particularly positive sign for me."

If you yourself were Warren's well-informed adult son or daughter who has been immersed in everything Berkshire and Warren for your entire life and knew your dad's complete perspective and passion for helping to ensure Berkshire's ongoing success and culture for many decades, you would likely not be as critical of Warren's desire and decision. 2/14 hardly seems 'packed with family appointees' to me. Reasonable people can have different opinions and can vote accordingly. Warren has earned my trust and none of his recommendations of family (or non family) Board members were made hastily.

I do Totally agree that a few board members should really step up & own a larger stake of Berkshire. Glad to see Greg beefing up his ownership.

A different perspective...

Deciphering Berkshire Hathaway's 2023 Proxy Statement
Some thoughts on share repurchases, executive compensation, shareholder proposals, and more...

"A lot of people's eyes glaze over when confronted with an SEC filing ' and for good reason. Companies seemingly go out of their way to drown readers in a sea of jargon and legalese.

Berkshire Hathaway is (way) better than most in this regard, but many of its shareholders still drag their feet instead of reading the proxy.

So, in the spirit of public service, I've gone through Berkshire's proxy statement several times, pulled out the most important details and information, and tried to summarize them in plain English. I hope it proves helpful.

https://kingswell.substack.com/p/deciphering-berks...

Spoiler alert - author expresses no opinion as to whether Howie and Susie are qualified to be BRK directors.

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Berkshire Hathaway FAQ

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