News broke this week that David Sokol has resigned from Berkshire Hathaway. Apparently, he helped persuade Warren Buffett to purchase a firm whose shares Sokol had invested in personally just weeks earlier. Thus, Sokol benefited handsomely when Berkshire made the acquisition. Sokol and Berkshire claim the trades had nothing to do with his resignation. Hmmmm....
I believe Buffett has a duty, given his stature and influence, to speak openly about this situation. He has to talk about the ethics of this behavior, and he has to discuss the lack of proper controls at Berkshire that allowed this to occur. He has to admit he made a big mistake not probing further when Sokol told him that he owned shares in the target firm. I believe that he also should tell us if he essentially fired Sokol for this behavior.
Buffett loves to share his views on a wide of topics. He loves wielding widespread influence. That's fine, but with that influence comes responsibility too. Many people admire Buffett and look up to him, including droves of young business students. Mr. Buffett, these young people are watching and listening. The ball is in your court.
1 comment:
I'm definatly agree with you on this blog.
I do not think Mr. Buffets reputation would be tarnished if he admitted to making a bad decision and what he plans on doing to prevent it from happening again!
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