Warren Buffett: DIVERSITY IS A WASTE OF TIME 👎 Companies should focus on business-savvy people 💰

Warren Buffett and Charlie Munger are discussing diversity and the importance of having a board composed of different types of people.

Warren Buffett and Charlie Munger do not believe that diversity is important when selecting board members, and it is not a factor they consider when assessing a company's potential.

There is no doubt that these older gentlemen adhere to traditional values. Today, many companies place a strong emphasis on diversity in their workforce, management, and board.

However, Buffett and Munger do not attach significant value to it.

Here is what they have to say on the subject.

ANDREW ROSS SORKIN: “You’ve explicitly stated that you do not consider diversity when hiring for leadership roles and board members. Does that need to change? Are we missing any investment opportunities as a result?
“And do you consider diversity, however defined, of company leadership and staff when analyzing the value of a company that you may want to purchase?

WARREN BUFFETT: Well, it’s a multiple part question. The answer to the last one is no.

No. We will select board members, and we lay it out. And we’ve done so for years, and I think we’ve been much more explicit than most companies.

We are looking for people who are business savvy, shareholder oriented, and have a special interest in Berkshire. And we found people like that. And as a result, I think we’ve got the best board that we could have.

They’re not in it — they’re clearly not in it for the money.

I get called by consulting firms who have been told to get candidates for directors for other companies, and by the questions they ask, it’s clear they’ve got something other than the three questions we ask, in terms of directors, in mind.

They really want somebody whose name will reflect credit on the institution, which means a big name. You know, and one organization recently, the one that did the blood samples with small pricks, got — they got some very big names on their board. Theranos, I think, or — is that the way you pronounce it, Charlie? Theranos?

CHARLIE MUNGER: Yeah.

WARREN BUFFETT: Yeah. I mean the names are great, but we’re not interested in people that want to be on the board because they want to make 2- or $300,000 a year, you know, for 10 percent of their time. And we’re not interested in the ones who — for whom it’s a prestige item and who want to go and check boxes or that sort of thing.

So I think we’ve got — we will continue to apply that test: business savvy, shareholder oriented, and with a strong personal interest in Berkshire.

And every share of Berkshire that our shareholders own, they bought just like everybody else in this room. They haven’t gotten them on an option or they haven’t — I’ve been on boards where they’ve given me stock, you know, and they — I get it for breathing, basically. Half a dozen places that are — maybe three or four that I was on the board of.

We want our directors to walk in the shoes of shareholders. We want them to care a lot about the business, and we want them to be smart enough so that they know enough about business that they know what they should get involved in and what they shouldn’t get involved in.

The people in the office — I’m hoping that when we take the Christmas picture again this year, they’re exactly the same 25 that were there last year.

The idea that you would have some department called Annual Meeting Department and, you know, you’d have a person in charge of it and she’d — or he — would have an assistant and then they would go to various conferences about holding annual meetings and build up — and then they’d hire consultants to come in and help them on the meeting. We just don’t operate that way. It’s a place where everybody helps each other.

My job is extraordinarily easy, but the people around me really make it easy. And part of the reason it’s easy is because we don’t have any committees. Maybe we have some committee I don’t know about, but I’ve never been invited to any committees, I’ll put it that way, at Berkshire.

And we don’t — we may have a PowerPoint someplace, I haven’t seen it, and I wouldn’t know how to use it anyway.

The — we just don’t do — we don’t have make-work activities. And we might go a to a baseball game together or something like that, but it — I’ve seen the other kind of operation and I like ours better, I’ll put it that way. Charlie?

CHARLIE MUNGER: Well, years ago I did some work for the Roman Catholic Archbishop of Los Angeles, and my senior partner pompously said, you know, you don’t need to hire us to do this. There’s plenty of good Catholic tax lawyers. And the archbishop looked at him like he was an idiot and said, “Mr. Peeler,” he says,” last year I had some very serious surgery, and I did not look around for the leading Catholic surgeon.” That’s the way I feel about board members.

[christophermhuntsr]

We all have same color blood and brains - it’s all about heart and soul love and integrity. Diversity is very last consideration if a tie. Go talk to an NFL team owner. ❤️🙏🐛✝️🦋🕊️🎶♾️

[JamesMcCown-yfqf]

There is some wisdom to be gained from a man who is 𝘁𝗼𝗼 𝗿𝗶𝗰𝗵 𝗮𝗻𝗱 𝘁𝗼𝗼 𝗼𝗹𝗱 to care what anyone thinks.

[mattheusser]

When was this recorded? Theranos fails some time back. Would be curious if this was from before the public realized the company was fundamentally fraudulent.