“Reputation”: Read the letter from a page that Buffett sent managers for 25 years

• Warren Buffett may be worth billions, but he has a blunt reminder that he sends every two years in a memorandum to his managers: reputation and planning for the future must have precedence about profit. It is a lesson that worked wonderfully for Buffett, which led to Berkshire Hathaway from a root company in the nineteenth century to a trillioning venture today.

Warren Buffett is widely considered one of the brightest minds of business – after all, he has spent decades maintaining Berkshire Hathaway as a multinational investment power.

Although it seems a quiet gentleman and a Coca-Cola fan, he admits that his leadership style can sometimes be “relentless.” In fact, the billionaire sends a harsh reminder to his managers every two years over his nonnegotiable principles, which include “zealously protecting Berkshire’s reputation”, something he believes is the basis of the entire company.

“We can afford to lose money – even a lot of money. But we can’t afford to lose reputation – not a reputation lint,” said the 94 -year -old businessman in a social media publication that is circulating again, a few months before leaving the company that led for over 50 years.

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Since assuming what was once a difficulty in difficulty in 1965, the well -known investor, valued at $ 152 billion, has transformed Berkshire Hathaway into one of the largest companies in the US. Under its leadership, Berkshire has reached a $ 1 trillion market capitalization this year. But from January 2026, Berkshire will no longer be under Buffett’s leadership; Instead, the memorandum will serve as a reminder that the future reputation is in the hands of the team.

“We must continue to measure each act not only for what is cool, but also for what we would be happy to see on the first page of a national newspaper, in an article written by an intelligent but hostile reporter.”

Protecting the reputation has been a constant theme in Buffett’s history – in a letter to the 2010 shareholders, he revealed that he sends that same reminder of a reputation for the team for over 25 years.

Famously, in 1991, speaking to members of Congress as President of the Investment Bank Salomon Brothers, Buffett conveyed this message to his employees: “Losing money to the company, I will understand. Losing a left of reputation for the company, I will be relentless.”

This feeling was echoed by other business billionaires, such as Jeff Bezos, who said, “Your mark is what people say about you when you’re not in the room.”

The need to always plan the future

In May this year, the legendary investor announced that he would leave the position of CEO until the end of the year, passing the command to his successor, Greg Abel, after observing how much he could do on a day at work.

And as part of succession planning, Buffett asks his managers to send a handwritten letter with recommendations to those who should take their place in the future, adding that the letter will be seen by anyone but it unless he is no longer CEO.

“I need your help regarding the issue of succession. I don’t expect any of you to retire, and I hope everyone will live until 100 years old. (In the case of Charlie, 110.)” Charlie Munger, who died in November 2023 at the age of 99, was a close friend, trusted partner and Buffett advisor for over 60 years.

“But if they do not live, please send me a note or email with your recommendation about who should take over tomorrow, if you are disabled overnight,” Buffett wrote.

In the future, Buffett told Wall Street Journal that he will continue to go to the office.

“I won’t stay home watching soap operas. My interests are still the same.”

Read the full memo of a and a half page

To: Berkshire Hathaway managers (“The stars”)
CC: Berkshire directors
THE: Warse E. Buffett
Date: December 19, 2014

This is my Biennial Letter to reaffirm Berkshire’s top priority and ask for your help in succession planning (not mine!).

The top priority – which surpasses everything, including profits – is that we all continue to zealously protect Berkshire’s reputation. We cannot be perfect, but we can try to be. As I have said in these memos for over 25 years: “We can afford to lose money – even a lot of money. But we can’t afford to lose reputation – not a lint of reputation.” We should continue to measure each act not only for what is cool, but also for what we would be happy to see on the first page of a national newspaper, in an article written by a smart but hostile reporter.

Sometimes your associates will say, “Everyone is doing this.” This justification is almost always bad if it is the main reason for a business action. It is totally unacceptable in evaluating a moral decision. Whenever someone uses this phrase as a justification, they are actually saying that they cannot find a good reason. If someone gives this explanation, say to try to use it with a reporter or judge and see how far it goes.

If you see something whose property or legality causes hesitation, be sure to call me. However, it is very likely that if an action causes this hesitation, it is very close to the limit and must be abandoned. There is a lot of money to be made at the center of the court. If it is doubtful if any action is close to the limit, simply assume that it is out and forget.

As a corollary, let me know immediately if there is any significant bad news. I can handle bad news, but I don’t like to deal with them after they got worse. The reluctance to immediately facing bad news was what turned a problem with Salomon from something that could have been easily resolved into something that almost caused a company with 8,000 employees.

Someone is doing something today at Berkshire that you and I wouldn’t like if we knew. This is inevitable: now we employ more than 330,000 people and the chance to spend a day without any bad behavior is null. But we can have a huge effect on minimizing such activities acting immediately to the smallest sign of impropriety. Your attitude in such subjects, expressed by behavior and words, will be the most important factor in developing the culture of your business. Culture, more than rules, determines how an organization behaves.

In other ways, talk to me about whatever you want, little or a lot. Each of you does a first class job in managing your operation with your individual style and you don’t need my help. The only subjects that need to be approved by me are changes in post-retirement benefits, acquisitions and any unusual capital expenses. But I like to read, so send anything that finds interesting.

I need your help in succession. I don’t expect any of you to retire and I hope everyone will live up to 100 years. (In the case of Charlie, 110.) But if they do not live, please send me a letter or email with your recommendation on who should take over tomorrow, if you are unable to overnight. These letters will be seen only by me unless I are no longer CEO, in which case my successor will need the information. Please summarize the strengths and weaknesses of your main candidate, as well as any possible substitutes they wish to include. Most of you have participated in this exercise in the past and others have already given your ideas verbally. However, it is important for me to receive a periodic update, and now that we add so many businesses, I need to have your thoughts in writing, instead of trying to keep them in memory. Of course, there are some operations that are managed by two or more of you – such as the Blumkins, the Merschmans, the pair of Applied Underwriters, etc. – And in these cases, forget this item. Your grade can be short, informal, handwritten, etc. Just mark as “guys to Warren.”

Thanks for the help in all this. And thanks for the way you manage your business. You make my work easier.

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