How Warren Buffett Manages

From an article by Fortune editor-at-large Patricia Sellers on how Warren Buffett manages his CEOs:

Jacques said that the best advice she’s gotten from Buffett comes in a memo that he sends to his 77 All-Stars every couple of years. Every memo includes some version of this message:


We can afford to lose money–even a lot of money. We cannot afford to lose reputation–even a shred of reputation. Let’s be sure that everything we do in business can be reported on the front page of a national newspaper in an article written by an unfriendly but intelligent reporter. In many areas, including acquisitions, Berkshire’s results have benefitted from its reputation, and we don’t want to do anything that in any way can tarnish it. Berkshire is ranked by Fortune as the second-most admired company in the world. It took us 43 years to get there, but we could lose it in 43 minutes.