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Warren Buffett on future Greg Abel interaction with Berkshire Board & on Independent Directors - YouTube
Channel: Billionaire Philosophy
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well my guess is that the board
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it's just the responders people do they'll be聽聽
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they'll put some more restrictions or they'll have聽
some more consultation on a lot of matters that聽聽
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that or some matters uh than聽
they they do with me i mean
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they won't need to but they'll feel that they聽
haven't had the experience they haven't seen聽聽
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them as long and then a whole bunch of things聽
and they'll feel that the delaware laws protects聽聽
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them better and incidentally they don't have聽
directors and officers liability insurance i mean
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virtually every company on the聽
new york stock exchange has it聽聽
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and uh we just don't buy it i mean to come on聽
the board and you're a trustee for a whole bunch聽聽
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of people with trust you and me i'm talking聽
about the directors in me uh you know fine聽聽
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but it it's very interesting people people go聽
on museum boards you know and they're expected聽聽
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to contribute people go on college boards聽
and they're expected to contribute money聽聽
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and it's they say it's a great honor to be on聽
a university board or museum board or whatever聽聽
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it's a great honor and therefore you should raise聽
money for us well frankly i think our board's more聽聽
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interesting than being on a university board聽
or you know or a hospital board or something聽聽
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i wouldn't know what they were talking about聽
anyway and on museum board or art board so and
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but people have found that they can make 300聽
000 a year uh you know which is way more which聽聽
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is enormously important to some people and聽
it's meaningless to others uh and i mean聽聽
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chances are if somehow they'd arranged it so that聽聽
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directors didn't get paid at all there'd be plenty聽
of people wanting to be directors and there'd be聽聽
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a prestigious sort of thing and all that but but聽
in effect it's it's money i that comes very easily聽聽
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i did the whole idea of the independent director聽
frankly is it just doesn't really make any sense聽聽
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you don't think a director is independent who聽
needs three hundred thousand the money yeah i mean聽聽
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he's independent of the way a slave is independent聽
i am i am going to read a few sentences which are聽聽
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absolutely the except case doctoring there's聽
just i don't want i don't want anybody to be聽聽
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identified obviously with us and these are聽
just but these are word-for-word excerpts
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and i'm not i'm not telling you whether to a聽
woman or a man i'm going to use a male pronoun聽聽
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because it's just because it's easier but i聽
picked out a few sentences from a letter i聽聽
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received many years ago and this letter said i'm聽
writing to you with a great deal of reluctance聽聽
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and a sense of personal embarrassment i have聽
tried all of the conventional means of raising聽聽
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the money this person needed a couple million聽
dollars and i wouldn't have known the person聽聽
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if i saw him on the street you know but but聽
uh but it wrote this letter and said i need聽聽
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a couple million dollars and uh and then this is聽
the item that i think you might find interesting聽聽
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and i've kept the letter my income has聽
composed 100 of my board fees well yeah i just聽聽
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looked him up and the time he was a director of聽
five prestigious companies and had been directors聽聽
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of others and directors and he was going聽
to be directing a whole bunch of things but聽聽
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he was desperate for money and he says he's聽
getting 100 of it for board fees and he was an聽聽
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independent director classified as an independent聽
director at every one of these companies uh and聽聽
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uh it's just astounding to me uh that uh you聽
know we're gonna have a general remaining just聽聽
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a couple of minutes we're gonna we're gonna start聽
it and uh um it's just astounding to me that uh uh
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in 2006 we own nine percent of the coca-cola聽
company i mean maybe they gave me a free coat聽聽
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i mean but we own nine percent at berkshire聽
hathaway we obviously cared about the future聽聽
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of the coca-cola company and and uh just so聽
happened and in that year calpers and a few others聽聽
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have recommended that we be voted against or聽
something or other and and at one time there were聽聽
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two big institutional investors voted because聽
they didn't think i was independent because聽聽
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dairy queen bought some coca-cola uh or the or聽
actually the people that have our franchise want聽聽
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some coca-cola i mean do they think i can't add聽
things and if we've got billions and billions聽聽
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and billions of dollars but that i'm going to聽
be compromised but it's it's just nutty and so聽聽
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one year my my my vote fell from 90 96 maybe聽
it was 98 vote approval to 84 percent because聽聽
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uh i figured whether it's 2004 to the somewhere聽
along the line they just decided that that聽聽
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i wasn't the right sort of person to be聽
able to handle these responsibilities聽聽
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and uh um you know the idea that somebody聽
it's an important part of their income聽聽
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i mean what they want they may want聽
to do a lot of other good things聽聽
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it doesn't it doesn't mean they're terrible聽
people but if the difference is whether you
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how you live in this case whether聽
the person might go broke uh聽聽
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how in the world you can call somebody like聽
an independent and say that anybody owns聽聽
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a lot of you know walter scott's聽
been not independent or maybe聽聽
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it's just ridiculous but it's the way the the聽
rules are and we we will we follow the rules but聽聽
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well they don't want them just independent now聽
they want one horse one rabbit one cow one what聽聽
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whatever um i mean i you know i feel like galileo聽
independence is not enough you gotta have a very聽聽
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diverse kind of independence yeah yeah and and聽
if if you desperately need the money in this聽聽
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case 100 of the income coming from it uh you're聽
on five of the most prestigious boards in the聽聽
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in the country and and and classify as independent聽
on each and other all you're hoping is that well聽聽
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if your ceo gets called by another ceo and聽
says is this guy okay and you say of course聽聽
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he's okay which means of course he doesn't cause聽
trouble and so he gets on the sixth board anyway
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always says it's it's not our idea of an聽
independent director it's all a little crazy which聽聽
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brings us the fact that we're not going to have聽
our annual meeting here and about 15 minutes we'll聽聽
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we'll we'll reconvene it 3 45 and then聽
we'll do the the the business of the meeting聽聽
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that is required and and you're all聽
welcome to stay here and uh it's very
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