Warren Buffet Intends to Appoint His Son as Berkshire’s Custodian of Values

January 12, 2012

Unlocking Word Meanings
Read the following words/expressions found in today’s article.

1. assent (n.) [uh-sent– a formal expression of agreement or acceptance
Example: The employees were glad to know of the management’s assent to their request for salary increase.

2. successor (n.)  [suhk-ses-er] – somebody or something that follows another and takes up the same position
Example: As outgoing executive assistant, I will make sure that all important documents are turned over to my successor.

3. custodian (n.) [kuh-stoh-dee-uhn] – a person responsible for something valuable; somebody responsible for holding or looking after valuable property on behalf of a company or another person
Example:   Annie is the custodian of her grandfather’s famous paintings.

4.  policy (n.) [pol-uh-see] –  program or system of actions adopted by a person, group, or government, or the set of principles on which they are based
Example: The dormitory where I stay has very strict policies on curfew.

5.  holding company (n.) [hohl-ding kuhm-puh-nee] – a company that has a controlling interest in one or more other companies through ownership of stocks or bonds
Example:  Black Holdings, Inc. is one of the biggest holding companies in the region with various businesses from clothes to furniture.

Read the text below.

Warren Buffett, US billionaire and CEO of Berkshire Hathaway, plans to appoint his son Howard Buffett as ‘a non-executive chairman’ of the company which is still subject to the board of directors’ assent.

According to Warren, he has always hoped that his son would be his successor in managing the company. However, while his son may be named non-executive chairman, neither Howard nor any member of his family has any interest in becoming the company’s CEO. 

As such, Howard would merely serve as the custodian of company values upon his father's retirement. This unpaid position would not include making policies or day-to-day decisions for the multinational holding company which is the eight largest public company in the world.

In Berkshire’s 2010 annual report, Warren said that his family would not be managing the business side of the company, but that he would want a family member to be in charge of maintaining the company’s strong culture. Warren stressed that his responsibilities both as Chairman and CEO would be divided instead between an officer in charge of operations and one or more executives in charge of investments.

The board already knows Warren’s recommendations for the said positions, and these are persons in whom he has complete confidence.

Although Howard would act as a chairman for Berkshire Hathaway, he would not necessarily be holding office there. He added that he would only agree to the position under the condition that he could still continue farming.

Howard has been actively engaged in farming, and it is from there that one can see his capability as a manager. He currently serves on the Berkshire board and runs a foundation aimed at assisting farmers in developing countries. Howard is also the author of several books on various subjects such as conservation and wildlife.

Viewpoint Discussion
Enjoy a discussion with your tutor. 

Discussion A

·         Do you think that it would be better for a company if only members of one family run it? Why or why not?
·         If you were the head of a multi-billion-dollar company, would you want your child to take your position even if he or she has  no interest in it? Why or why not?

Discussion B

·         What qualifications do you think should a CEO have?
·         If you were Howard Buffett, would you consider taking over the CEO position?

January 12, 2012