One gem I found on Berkshire’s website is this special letter regarding the past, present and future that Charlie Munger wrote containing a list of the few activities Berkshire’s Chairman (Warren) would reserve for himself.
Charlie says he borrowed these from the management system and policies of Berkshire under Buffett called the Berkshire system. They are listed below for reference (I changed the order slightly) but I encourage you to read the entire letter.
- His first priority would be reservation of much time for quiet reading and thinking, particularly that which might advance his determined learning, no matter how old he became.
- Manage almost all security investments, with these normally residing in Berkshire’s casualty insurers.
- Choose all CEOs of important subsidiaries, and fit their compensation and obtain from each a private recommendation for a successor in case on was suddenly needed.
- Deploy most cash not needed in subsidiaries after they had increased their competitive advantage, with the ideal deployment being the use of that cash to acquire new subsidiaries.
- Make himself promptly available for almost any contact wanted by any subsidiary’s CEO, and would require almost no additional contact.
- Write a long, logical, and useful letter for inclusion in his annual report, designed as he would wish it to be if he were only a passive shareholder, and he would be available for hours of answering questions at annual shareholder’s meetings.
- He would try to be an exemplar in a culture that would work well for customers, shareholders, and other incumbents for a long time, both before and after his departure.
- Spend much time in enthusiastically admiring what others are accomplishing.