Gustavo Ballvé on August 3rd, 2016
Corporate Governance, Food for thought, Home, Signal or Noise

It is impossible not to be criticized when you are in the spotlight. Case in point: Warren Buffett. In the space of two weeks he has been criticized for supporting Hillary Clinton in the US presidential race, for a Corporate Governance “manifesto” co-signed by several CEOs (I’ll adress that in a separate post), and now for being increasingly “relentless” in his search for efficiency.

Take this last part:  The most usual criticism in the last 15 years or so had been his hands-off approach, especially in his large stock positions such as Coca-Cola. Critics said his tendency to avoid conflicts and “aw-shucks” brand of management did not root out the inefficiencies that other management teams were capable of doing. He seemed “out of touch with the times” – again.

In the last few years Buffett partnered with 3G Capital in a few deals, a group long known for its relentless cost-cutting. Now he has bought Precision Cast Parts, a company whose culture (and CEO) is described by this Bloomberg piece as “bullying” and “bruising”.

I have been studying Buffett, Munger and Berkshire Hathaway since 2001, and the inconsistencies between Mr. Buffett’s speech and actions are sometimes pretty obvious. He would not be human otherwise. Analytically speaking, it is also very important that we never grant anyone a free pass: we should always both judge actions for what they are AND keep in mind context and perspective. Has he failed sometimes? Yes, of course. Has his actions sometimes contradicted his words? Yes. For the most part, however, Buffett’s actions in the last 60+ years have lived up to most of his speech (and I alluded to that in a December 2009 post).

That is more than we can say of the majority of the CEOs, fund managers, government officials, journalists, amateur bloggers (!) and, well, people out there.

Tags: , , , , ,

Comments are closed.

Back to last page or go to the home page