Being a director is a "tough job" · Transcript

WarrenWe are completely out of step with modern practices with directors. The modern practice is to have one from each diversity category and to have a whole lot of people who need more or less the $100,000 or $200,000 per year that they're paid for being a director. And people think this makes the system better. At Berkshire, all the directors are rich, and they own a lot of stock in Berkshire, and they're all very smart, and they don't get any liability insurance provided by Berkshire. So we've been waiting for our system to spread, but we seem to be losing. Yeah, it's a tough job at times to be a director. The real problem that you can face and may often face is when you're dealing with mediocrity. I mean, if you have a baseball team and you have a 240 hitter in the majors, 240 hitter in the majors is still a pretty good baseball player, but if your job is to have a winning team, you get rid of them, and you find somebody that can bat 280 or 290 in field just as well. In business, the tough part is to get is to get rid of something a notch or two above mediocrity, but not the best one that could be found. And when people meet every couple of months, they come from different parts of the country, and they have the normal social instincts. They don't like to have rump meetings or to sort of talk behind people's backs. It's very difficult for a group, and particularly, if it's a group like Charlie described where a significant number of them, the director's fees they earn are important to their well-being, and they'd love to be recommended for another board and add another $100,000 a year to their income. It's very difficult for somebody to lead a charge and all of a sudden start at the meeting or trying to arrange a rump meeting of some sort to say, you know, we really think this guy at the head of the table is no good. And to, if you see a merger that doesn't make sense, Charlie and I have seen a lot of them, and we've been on the boards, and sometimes we've spoken up, and sometimes we haven't spoken up. To feel that, you know, the group around you in terms of social behavior can only tolerate a certain amount of obnoxiousness on the part of you yourself.