Warren Buffett outlined nearly 15 years ago the reasons why his son Howard would eventually become the “guardian” of the Berkshire Hathaway conglomerate. At that time, the famous investor said that having his son would add “an additional layer of protection” to the decisions of the empire currently valued at 1.1 trillion dollars.
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The baton pass was completed this Friday. Buffett, 96, handed over the presidency of Berkshire Hathaway to his eldest son, 71. Now, Howard Buffett has the task of maintaining the values and culture that the so-called Oracle of Omaha (named after the city in Nebraska) instilled in the company that houses everything from the insurance giant Geico to railroads and clothing companies, and that owns a respected investment portfolio.
As a non-executive chairman, “Howie” will be a kind of protector of the empire created by his father. Investment management will continue to be led by Greg Abel, a key figure with more than 25 years in the company who succeeded the legendary Buffett as CEO in January. In a letter sent to shareholders this Friday, Buffett praised Abel and explained that his extraordinary performance led him to complete the transition process.
“It is the right time to complete it. I will become chairman emeritus and continue as a director. My son, Howard, will succeed me as chairman. Howard has been a director of Berkshire for 33 years. It has been a longer learning process than I had when I took the reins at 34. Greg runs the company; Howard will protect its culture and values, both of which are worth more than anything on our balance sheet,” Buffett wrote.
“Think of Howard as a policy that shareholders own and on which they hope never to have to file a claim,” he added.
Although Howard Buffett is a familiar face at Berkshire Hathaway, his paths took varied directions while his father consolidated what analysts consider one of the largest companies in the United States.
He was sheriff of Macon County, Illinois; part of the board of directors of companies such as Archer Daniels Midland, Coca-Cola, and ConAgra Foods; a producer of corn and other agricultural commodities; a philanthropist and even a photographer and executive producer of Academy Award-nominated documentaries, according to the page of his foundation, The Howard G. Buffett Foundation.
In his philanthropic projects, for example, he has delved into the causes of migration from the countries of the so-called Northern Triangle of Central America — Guatemala, Honduras, and El Salvador — and has delivered humanitarian aid in Ukraine.
From cornfields in Illinois to agricultural projects in El Salvador
A 2011 60 Minutes program report, made when his father announced that he would one day succeed him as company president, helps to get to know him in those very different facets. He is seen riding a tractor harvesting corn on his farm in the small town of Pana, Illinois. Also with a camera in hand on trips to promote agricultural projects in places as distant as Ethiopia and El Salvador.
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In the interview, he shared an anecdote that illustrates how unaware he and his sister, Susan, were as children of the gigantic company that their father was gradually building. “We knew he was a securities analyst and had no idea what that meant,” he said.
“When my sister was asked at school what her father did, she said he was a security guard, and that’s what we thought he did for a long time, we didn’t know the difference,” he added with laughter.
Over the years, Howard Buffett dropped out of three universities. But that, far from angering his father, became an episode that reflects the trust he always had in his son. “He was just trying to find his own path,” Warren Buffett replied when asked if this worried him. “It really didn’t make a difference to me whether he found a university or not,” he added.
A mixed reception among analysts
Warren Buffett was stricter when, over time, he bought land from his son and required him to pay rent for it. “I don’t think [giving him the farm] would have been the right way to raise my son. I don’t think he had the right to be given one just because his last name was Buffett.”
In those fields, Howard found what he couldn’t in his university years. Something he said he does not expect to set aside while at the helm of Berkshire Hathaway.
His arrival at the position has had a mixed reception among analysts. Some consider him a kind of shield for a business that as of last June 30 had more than 360 billion in cash to invest; others see him as someone lacking the experience that comes from being involved in the daily operation of a business of such magnitude.
His father, however, is clear about the reason behind the move. What was expressed in the letter to shareholders is something he has considered for years. “He knows a lot about the business, in terms of its values. He may not know what kind of insurance policy we are signing today (…) but he knows the values,” he insisted when asked about this in 2011.
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