Lawrence Cunningham on shareholder proposals:
like other great American companies, Berkshire is a magnet for controversial shareholder proposals. Too often, these proposals have degenerated into distracting rituals rather than opportunities for real engagement on corporate topics.
This year is no exception, with Berkshire hosting copycat votes on contentious matters from greenhouse gas emissions to workforce diversity that will certainly fail. The doozie this year, however, is a proposal before shareholders at many companies to split the jobs of chairman and CEO — in Berkshire’s case, effectively firing Warren Buffett.
Corporate gadflies roam from company to company merely repeating the same nostrums. They present themselves as knowing which arbitrary rule is best for all companies and shareholders. The practice of ignoring company specifics induces boards to deliver the same rote response the proposal deserves.
I’m glad to have Warren Buffett and his team in charge. I know I can trust them. I just cannot think of any other corporation I would trust as much as Berkshire Hathaway. While I’m all for workforce diversity and for phasing out greenhouse gas emissions, I can trust the management to do the right thing.
I’m glad that Warren Buffett and his top associates hold the majority of votes. We never have to worry that a corporate raider will take over Berkshire Hathaway and ruin it.
I’m shocked that somebody out there wants to fire Warren Buffett. Why argue with such a sterling record? His mind is still just as sharp now as it was in years and decades past. I trust Warren Buffett to step down if the situation calls for this, and I trust his hand-picked successors to do the right thing. Buffett and Munger addressed the succession issue many years ago. I’m glad that they’re both still alive and well.