Should You Build Your Board Like Warren Did?
One company's seven-member board is dominated by the company's founder and includes a vice chairman who has been the chairman's alter ego for half a century, the chairman's attorney and the chairman's wife and son. Since this business is publicly traded, new rules about board composition are forcing a search for new, independent directors.
The company pays its directors only a pittance and provides no directors or officers insurance. The company wants shareholder-oriented, business-savvy directors with large ownership positions and is completely uninterested in building a trophy board of known individuals.
The company sought to find directors with a help wanted ad posted on its Web site.
The company is Berkshire Hathaway. The help wanted ad was composed by chairman and CEO Warren Buffet. We will select directors who have huge and true ownership interests, he wrote, expecting those interests to influence their actions to a degree that dwarfs other considerations such as prestige and board fees.
Whom did he choose? Two old friends: Donald Keough, 72, retired Coca-Cola president and Tom Murphy, 76, retired chairman and CEO of Capital Cities/ABC.
Articles purchased or downloaded from Family Business Consulting Group® are designed to provide general information and are not intended to provide specific legal, accounting, tax or other professional advice. Since your individual situation may present special circumstances or complexities not addressed in this article and laws and regulations may change, you should consult your professional advisors for assistance with respect to any matter discussed in this article. Family Business Consulting Group®, its editors and contributors shall have no responsibility for any actions or inactions made in reliance upon information contained in this article. Articles are based on experience on real family businesses. However, names and other identifying characteristics may be changed to protect privacy.
The copyright on this article is held by Family Business Consulting Group®. All rights reserved.
Articles may be available for reprint with permission. To learn more about using articles for your publication, contact firstname.lastname@example.org.