When Warren Buffett was 10 years old, he had an epiphany. With enough money, he could be secure and free.
Now at age 84, he emphasises a different asset to his Berkshire Hathaway management team: reputation.
In a biennial memo to his senior managers surfaced by the Wall Street Journal, Buffett writes that “the top priority — trumping everything else, including profits — is that all of us continue to zealously guard Berkshire’s reputation.”
We can’t be perfect but we can try to be. As I’ve said in these memos for more than 25 years: “We can afford to lose money — even a lot of money. But we can’t afford to lose reputation — even a shred of reputation.”
We must continue to measure every act against not only what is legal but also what we would be happy to have written about on the front page of a national newspaper in an article written by an unfriendly but intelligent reporter.
Buffett goes on to say that if any of his managers see anything with a “propriety or legality” that causes them to hesitate, then give him a call.
The immediacy is crucial. If there’s anything Buffett hates, it’s bad news that has “festered for a while.” He references his time with Salomon Brothers, the troubled bank he served as chairman of in the 1990s.
“A reluctance to face up immediately to bad news is what turned a problem at Salomon from one that could have easily been disposed of into one that almost caused the demise of a firm with 8,000 employees,” he writes.
As seen at the Journal, here’s the full memo:
NOW WATCH: Ideas videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.