By definition, an "oracle" is an infallible authority, so far be it from me to criticize the decision-making of the Oracle of Omaha, Warren Buffett - the third richest man in the world. For the second time this year, the Chairman and CEO of Berkshire Hathaway (BRK-A, BRK-B) is entangled in succession planning.
Buffett made an unofficial proclamation on 60 Minutes last night that his 57-year old son, Howard Graham Buffett, will eventually take the reins of the 8th largest company in America... sort of. Pending approval from the Berkshire board, the younger Buffett could hold the title of "Non-executive Chairman," an unpaid position and "guardian of the culture" of Berkshire Hathaway.
The media moment (which is what this was, since there was no official press release from Berkshire), comes just 8 months after Buffett protege and heir apparent David Sokol resigned in disgrace amidst an insider trading scandal. That incident not only left a blemish on Buffett's resume, but as Barron's points out, "the decision to tap his son reveals that the scars of the Sokol affair have not healed yet."
So who exactly is Howard Buffett?
An Outsider Inside the Berkshire Hathaway Empire
Warren Buffett's middle child is a corn and soybean farmer who we now know likes to get his hands dirty and drive his own tractors and satellite-guided combines when not traveling the world in the name of philanthropy. The younger Buffett has been on the board of Berkshire for nearly 20 years, and also currently sits on the boards of Coca-Cola (KO) and Lindsay Corp. (LNN) as well as a number of non-profits, including his own, The Howard G. Buffett Foundation (which happens to be run by a 28 year-old lad named Howard Warren Buffett, a.k.a. his son).
"It's a weird, weird way to announce executive turnover...he's non-executive chairman which means he's gonna sit there as a figurehead, and it doesn't matter all that much," Macke says in the attached clip. "There's a huge Warren Buffett premium, not a Howie Buffett premium."
Unofficially, Warren Buffett describes his son's new position as a sort of corporate policeman, making sure whoever it is that does take over the day-to-day role of running Berkshire can't "use it as their own sandbox."
Pretty heady stuff from an oracle who can now take credit for handing over his $30 billion fortune to college dropout Bill Gates and his $190 billion holding company to his college dropout kid!
But you know what? I like the move. As much as the ascension of Howie won't change Berkshire and doesn't shed any light on who the new CEO will actually be when 81 year-old Warren Buffett steps down, it's a cultural wildcard and I am all for that. And when you consider the track-record of the typical college educated, MBA's and investment bankers who are overseeing corporate America today, I think an argument can be made that it's time to give ''other life experience" its due.
For More see: After Sokol, Warren Buffett Wants Farmer Son to Guard Culture at Berkshire
