Buffett Reminds His Top Managers: Reputation Is Everything 

Warren Buffett‘s “All-Stars” are getting their biennial reminder this month that they need to guard Berkshire Hathaway Inc.'s reputation–and plan for the future.

Bloomberg News

Mr. Buffett, who’s run Berkshire for the past five decades, sends a memo every other year to the managers of each of Berkshire’s 80-plus subsidiaries that emphasizes those two points. The latest such memo, which varies little from the version Mr. Buffett shared with investors in Berkshire’s 2010 annual report, carries Friday’s date.

Mr. Buffett reminds his managers–who head units that lease planes, sell jewelry, print newspapers, rent office furniture, make bricks, and train pilots, among other things–that their top priority must be to “zealously guard Berkshire’s reputation.”

“As I’ve said in these memos for more than 25 years,” he writes in the latest one, “we can afford to lose money–even a lot of money. But we can’t afford to lose reputation–even a shred of reputation.”The concern about reputation is a theme Mr. Buffett has hit on in other forums as well through the years. Most famously, it was central to testimony he delivered to Congress after he stepped in as chairman of a floundering Salomon Brothers in 1991. He told legislators that his message to employees then was: “Lose money for the firm, and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless.”

The latest memo also reminds the managers–who he’s dubbed “The All-Stars”–to keep him in the loop about “who should take over tomorrow if you should become incapacitated overnight.”

See the Rest of the Article: http://blogs.wsj.com/moneybeat/2014/12/19/buffett-reminds-his-top-managers-reputation-is-everything/ 

See Related article on Buffett: http://brooklyninvestor.blogspot.com/2015/05/the-missing-manual-berkshire-hathaway.html