Sokol's Gone...Move On
A group of Buffett biographers and experts comment on the David Sokol incident and what it means for Berkshire's internal controls.
A group of Buffett biographers and experts comment on the David Sokol incident and what it means for Berkshire's internal controls.
Jason Stipp: I am Jason Stipp for Morningstar.
We are here at the 8th Annual Value Investor Conference, and we are talking today with several Buffettologists--Buffett experts and authors--about the David Sokol incident and what it means for internal controls at Berkshire Hathaway.
Roger Lowenstein: I think what happened with Sokol brings out what might be Buffett's greatest managerial shortcoming--and by the way it's the other side of his great virtue--he is not a meddler. He delegates. He lets people run their own shows. He says, I am looking for businesses that already had management; he can't supply it. Usually that works. When the guy is the right guy, it works terrifically. But once in a while if the guy is not the right guy, that's not Buffett's strength. But, look, at the end of the day, he's gone. Sokol is gone.
Lauren C. Templeton: I think there are unethical people in every line of business, and this clearly was the case. I think it's impossible to totally protect yourself from unethical people. I think Warren Buffett runs a great business, and this is a very unfortunate situation.
Sham M. Gad: If you've read Buffett's letters for the past 10-20 years, he has made a very direct point that, he doesn't want to tolerate any playing around the edge of the court; it's all about playing center court. I don't think it's going tarnish Berkshire's internal controls. I think as a matter of fact Berkshire probably has better internal controls, more than most companies. So I think it's an unfortunate situation, and I think that's going to be end of it. Sokol is gone, and they are going to move on.
Scott Phillips: My impression of Berkshire Hathaway and Warren Buffett and the way he approaches his managers is, it's a cohesive environment of trust. There is deep trust in all the individual managers that they'll adhere to the code of ethics. Buffett has always described doing business on a handshake basis. So, I think that perhaps, maybe they were letting their guard down a little, not keeping an eye on things as much as you would find at other corporations. So that's possible.
John Price: I think it raises some concerns. I am not particularly worried about it. I think Warren probably slipped a little this time, but it is great that the audit committee came out with that report, and so I hope not too much time is wasted on it tomorrow at the Annual Meeting. I think that they are going to clear it away very well.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals
and individual investors. These products and services are usually sold through
license agreements or subscriptions. Our investment management business generates
asset-based fees, which are calculated as a percentage of assets under management.
We also sell both admissions and sponsorship packages for our investment conferences
and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.