Warren Buffett's annual festival for Berkshire's shareholders is an extraordinary example for the rest of the corporate world
04-May-2015 •Dhirendra Kumar
The annual 'Woodstock for Capitalists' was just concluded in the city of Omaha in Nebraska, USA. That's the name given to the annual shareholders' meet (AGM in Indian parlance) of Berkshire Hathway, the holding company of the conglomerate headed by Warren Buffett, who took over Berkshire 50 years ago.
This meet is unlike anything that Indian investors are used to. In a hall next to the one where the actual meeting is going on, there's a massive shopping event put up by companies that are part of the group. There are discounts aplenty, as well as special products. Heinz has commemorative ketchup and mustard with Buffett's and his deputy Charlie Munger's caricatures on them and Fruit of the Loom has t-shirts with the slogan 'The Next Warren Buffett'. Can you imagine anything like that in an Indian AGM? The closest thing I've heard of is one where bhujia packets were distributed and there was a bhujia trader outside offering to buy back the packets at a discount.
To be fair, it's not just Indian AGMs that don't match up to Berkshire. This festive AGM is unique in the world--at least among large companies. What is truly unique about Berkshire's show is the transparency. Buffett's and Munger's willingness to face nasty questions in public. A couple of years ago, Buffett invited Douglas Kass, a hedge fund manager known to be hostile to him to ask questions, This year, channeling the audience's questions as well as asking his own was renowned financial journalist and writer Andrew Ross Sorkin.
And Sorkin didn't hold back either--there were a lot of sharp questions about Buffett's age, succession issues, pressure from activist investors, and the poor performance of Berkshire companies like Netjets. This sounds utterly amazing to us, since Indian companies go to extraordinary lengths to avoid any questioning.
All in all, this festive AGM is a great window to how things would be if corporate managements were open, fair and transparent, and didn't feel the need to run away from shareholders.