Warren Buffett is famed for his investing techniques that helped him become the 2nd wealthiest man in the world and his willingness to give advice to those who ask. He also heads the 4th largest company in the world, Berkshire Hathaway, as chairman and CEO.
When you stop and think for a moment about Buffett’s hopes for the company, it becomes pretty clear that Buffett really loves Berkshire. He took a textile company with shares valued at $60 of today’s dollars and made it a mega-conglomerate with shares valued close to $250,000. Buffett has made huge improvements to Berkshire during his time there, and after more than 50 years with the company, people are wondering what will happen to Berkshire after Buffett. He has said before that he is decided on who will secede him as CEO, but considering the high expectations Buffett holds Berkshire to, why isn’t he training his successor now?
“Most managers at Berkshire are doing what they want— running their businesses. We don’t see an advantage in having a crown prince… To name one now could create problems,” Buffett explained simply at a past shareholder meeting.
Buffett goes on to explain that the new CEO, whoever it will be, is learning more by managing their own portfolio and businesses than by mimicking Buffett’s strategies. He explains that each person on his Berkshire team has their own “batting style” but each has a great record.
“The biggest job is they will have to develop relationships with managers, sellers of businesses, shareholders…. Their biggest challenge will be to understand personalities,” Buffett went on to say. If I had to guess, I would say Buffett has long been observing how each of his potential CEO’s handled these situations and made a careful decision accordingly.