There’s no doubt that Berkshire Hathaway has done a lot of preparing for and thinking about Warren Buffett’s eventual retirement (or death).
But it’s obviously a point of concern for Berkshire’s investors — the topic is popular during the Q&A at the company’s annual shareholder meeting — and Fitch noted the Buffett problem when in downgraded the firm’s credit rating last week.
FT’s Lex has some sensible advice on how the company might approach the matter:
There are a few tricks that might help. The first thing a company should do is announce a clear exit timetable, but one where the retirement date chosen is still a long way out. Next, a worthy successor must be found, and word carefully spread around that this person is increasingly doing all of the work anyway, and has been for years. And third, Mr Buffett, for example, must begin to make fewer appearances in public. Out of sight, out of mind, as they say.
This might be painful, especially given how beloved Warren is, but it might be smart. Obviously he and Munger will continue to do their Q&A each year as long as he sticks around, but it would be a good idea for the company to start elevating its stars, at least in the media. How many people could recognise Ajit Jain, the superstar head of Berkshire Re that Buffett has called his best investment? Even while Buffett is around, it’d be wise to have more representatives in the media, and more insight into what they do for the company.
In a roundabout and accidental sense, Apple’s done this. It was prompted by Steve Jobs’s mystery illness, but the verdict from this year’s Macworld was that relatively unknown marketing exec Phil Schiller was probably better than most tech CEOs. Not that Schiller will necessarily be the next CEO, just that Apple is showing it has other stars besides Jobs.
At this point, that’s exactly what Buffett, 78, needs to do.
(via Controlled Greed)