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.
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