The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [451]
Tom Murphy and Don Keough had just been voted in as directors, joining Charlie Munger, Ron Olson, Walter Scott Jr., Howie, Big Susie, and Kim Chace, the lone representative of the old Hathaway textile family. There had been some grumbling about these appointments, with shareholders making noises about cronyism, and lack of balance and diversity. But the idea of a board of directors overseeing Warren Buffett was ludicrous. A board made up of Barbie dolls would do just as well. When the Berkshire board met, it was to listen to Buffett teach, just as every occasion—from a party to a luncheon to a sing-along with Jim Clayton—turned into an opportunity for Buffett to figuratively stand at the blackboard, fingers dusty with chalk.
The reason shareholders cared about Berkshire corporate governance was not oversight, however, but the question of who would succeed Buffett, who was now almost seventy-three. He had always said there was a “name in an envelope” crowning his successor. But he would not acquiesce to the pressure to reveal the name, because that would tie his hands to one person, and events could change. It would also effectively begin the transition, and he certainly wasn’t ready for that.
There was, of course, a guessing game about who this person could possibly be. Most of the managers of the various companies Buffett bought seemed unlikely candidates. Buffett liked managers like Mrs. B—people who shunned the spotlight, who worked as tirelessly as a human anthill—but these people did not manage capital. Where was the capital allocator who could run this thing? The right person had to be willing to sit behind a desk reading financial reports all day long, yet excel at dealing with people in order to retain a bunch of managers who wished they were still working for Warren Buffett.
“I have this complicated procedure I go through every morning,” Buffett said, “which is to look in the mirror and decide what I’m going to do. And I feel at that point, everybody’s had their say.”23 The next CEO would have to be a superb leader—and yet oversized egos need not apply for the job.
As the board meeting ended on Monday, the town emptied of shareholders, and the Buffett family headed to New York for their annual trip. Every year they traditionally attended a dinner with the East Coast members of the Buffett Group, held at Sandy and Ruth Gottesman’s house, where Susie would pile into Warren’s lap and run her fingers through his hair, and Warren would gaze enraptured at his wife. But this year it seemed obvious that Susie wasn’t feeling well. At lunch one day, dressed beautifully in a light wool skirt suit with a wraparound shawl, she ate only a tiny piece of chicken and some carrots with a glass of milk. She said she was fine but wasn’t that convincing.
Within two weeks, shortly before they were to have left for the trip to Africa that she was so excited about, she was admitted to the hospital with another bowel obstruction. There, the doctors found that she was anemic and had an esophageal ulcer. In a huge disappointment for the family—at least some in the family—the Africa trip had to be postponed by a year, to the following spring. Even Warren was dismayed, because he knew how much the trip meant to Susie. But, asked if he was worried, he said, “Oh, no, it would bother Susie if she thought I was worrying about her. She wants to worry about me, not the other way around. She’s a lot like Astrid in that sense. I’m not a worrier in general, y’know.”
Although the reason for the cancelation was regrettable, it turned out to be a good thing that Buffett was around that June. As the meeting at which the Clayton shareholders would vote on the merger approached, opposition to the deal swelled like a blister chafed by shareholders’ resistance to the price—even to the very idea of selling to Berkshire. Rumors started that another bidder would come in.24 Investors assumed that