Calling David Sokol's actions "inexcusable", Warren Buffett sought to distance himself from his former protégé at this weekend's Berkshire Hathaway annual meeting.
By admitting he made a mistake with his original handling of the situation, Buffett hoped to silence his critics and move on from an issue that has damaged his previously sterling reputation.
But Buffett failed to put the matter to rest, according to Paul Argenti, an expert in crisis management and professor of corporate communications at Dartmouth's Tuck School of Business.
"I don't think he was as ruthless as I would have expected," Argenti says. "The unfortunate reality is he's getting away with something most executives would not be able to get away with."
What Buffett is "getting away with," according to Argenti, is being "a little too nonchalant" considering this is a "huge governance issue. I don't think he's going to be allowed to operate in the same folksy manner going forward."
Furthermore, the professor thinks "The Oracle" missed an opportunity to turn the Sokol affair into a "teachable moment" and reaffirm Berkshire's commitment to ethical behavior. Merely admitting errors in the initial handling of the Sokol matter is "not enough," Argenti says. "[Buffett] needed to really come down hard and make an ethical example of this and he didn't do that." (See: "Be Ruthless": Crisis Expert's Advice for Warren Buffett.)
Argenti says he will continue to use Warren Buffett as an example of businessman with virtue in his class on corporate responsibility but the Sokol affair is a "black mark [and] Warren Buffett should have no black marks. "
