Corporate Governance - the Warren Buffett way

Of all contemporary investors and businesspersons, Warren Buffett ranks as the creme de la creme of corporate leaders and thinkers, and has the added gift of expressing his views in such a succinct manner.

Over the next seven weeks CSNZ will present in the Technical Briefs excerpts from The Essays of Warren Buffett: Lessons for Corporate America selected arranged and introduced by Lawrence A. Cunningham.

The Introduction to essays on Corporate Governance opens:

"Many annual meetings are a waste of time, both for shareholders and for management. Sometimes that is true because management is reluctant to open up on matters of business substance. More often a non-productive session is the fault of shareholder participants who are more concerned about their own moment on stage than they are about the affairs of the corporation.

What should be a forum for business discussion becomes a forum for theatrics, spleen-venting and advocacy of issues. (The deal is irresistible: for the price of one share you get to tell a captive audience your ideas as to how the world should be run.) Under such circumstances, the quality of the meeting often deteriorates from year to year as the antics of those interested in themselves discourage attendance by those interested in the business.

Berkshire's meetings are a different story ..."

This first instalment addresses Owner-Related Business Principles and -

"Although our form is corporate, our attitude is partnership we think of our shareholders as owner partners, and of ourselves as managing partners. (Because of the size of our shareholdings we are also, for better or worse, controlling partners.) We do not view the company itself as the ultimate owner of our business assets, but instead view the company as a conduit through which our shareholders own the assets" ... READ MORE

Upcoming weeks the Technical Briefs will feature; Full and Fair Disclosure, Boards and Managers, The Anxieties of Business Change, An Owner-Based Approach to Corporate Charity, A Principled Approach to Executive Pay and Audit Committees.