{"id":34452,"date":"2025-04-07T23:56:00","date_gmt":"2025-04-07T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=34452"},"modified":"2025-04-08T10:28:37","modified_gmt":"2025-04-08T02:28:37","slug":"how-buffett-decide-on-ceos","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2025\/04\/07\/how-buffett-decide-on-ceos\/","title":{"rendered":"How Buffett decide on CEOs?"},"content":{"rendered":"\n<p>In <a href=\"https:\/\/berkshirehathaway.com\/letters\/2024ltr.pdf\" target=\"_blank\" rel=\"noopener\">Buffett&#8217;s 2024 Berkshire Hathaway shareholder letter<\/a>, I will now quote directly (<em>in italics<\/em>) some of the considerations he personally believes are important when he decide on CEOs. <\/p>\n\n\n\n<p>I suggest you read my post of: &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/10\/18\/buffett-manage-berkshire\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does Buffett manage Berkshire?<\/a>&#8220;, before move next.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/04\/07\/how-buffett-decide-on-ceos\/#Its_hard_to_find_great_manager\" >It&#8217;s hard to find great manager<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/04\/07\/how-buffett-decide-on-ceos\/#Degree_are_not_considered\" >Degree are not considered<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/04\/07\/how-buffett-decide-on-ceos\/#Leaderships_mistake_impact_big_than_financial\" >Leaderships mistake impact big than financial<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/04\/07\/how-buffett-decide-on-ceos\/#Cheat_shareholders_eventually_cheat_yourself\" >Cheat shareholders eventually cheat yourself<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/04\/07\/how-buffett-decide-on-ceos\/#Relative_articles\" >Relative articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Its_hard_to_find_great_manager\"><\/span>It&#8217;s hard to find great manager<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em>Every company doesn\u2019t have an easy-to-understand business and there are very few owners or managers like Pete. And, of course, I expect to make my share of mistakes about the businesses Berkshire buys and sometimes err in evaluating the sort of person with whom I\u2019m dealing.<\/em><\/p>\n\n\n\n<p><strong>Note<\/strong>: Pete Riegel sold Forest River, which he founded and managed, to Berkshire in 2005.<\/p>\n\n\n\n<p><em>But I\u2019ve also had many pleasant surprises in both the potential of the business as well as the ability and fidelity of the manager. And our experience is that a single winning decision can make a breathtaking difference over time. (Think GEICO as a business decision, Ajit Jain as a managerial decision and my luck in finding Charlie Munger as a one-of-a-kind partner, personal advisor and steadfast friend.) Mistakes fade away; winners can forever blossom.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Degree_are_not_considered\"><\/span>Degree are not considered<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em>One further point in our CEO selections: <strong>I never look at where a candidate has gone to school. Never!<\/strong><\/em><\/p>\n\n\n\n<p><em>Of course, there are great managers who attended the most famous schools. But there are plenty such as Pete who may have benefitted by attending a less prestigious institution or even by not bothering to finish school. Look at my friend, Bill Gates, who decided that it was far more important to get underway in an exploding industry that would change the world than it was to stick around for a parchment that he could hang on the wall. (Read his new book, Source Code.)<\/em><\/p>\n\n\n\n<p><em>Not long ago, I met \u2013 by phone \u2013 Jessica Toonkel, whose step-grandfather, Ben Rosner, long ago ran a business for Charlie and me. Ben was a retailing genius and, in preparing for this report, I checked with Jessica to confirm Ben\u2019s schooling, which I remembered as limited. Jessica\u2019s reply: \u201cBen never went past 6th grade.\u201d<\/em><\/p>\n\n\n\n<p><em>I was lucky enough to get an education at three fine universities. And I avidly believe in lifelong learning. I\u2019ve observed, however, that a very large portion of business talent is innate with nature swamping nurture.<\/em><\/p>\n\n\n\n<p><em>Pete Liegl was a natural.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Leaderships_mistake_impact_big_than_financial\"><\/span>Leaderships mistake impact big than financial<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><br><em>At other times, I\u2019ve made mistakes when assessing the abilities or fidelity of the<br>managers Berkshire is hiring. The fidelity disappointments can hurt beyond their financial impact, a pain that can approach that of a failed marriage.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Cheat_shareholders_eventually_cheat_yourself\"><\/span>Cheat shareholders eventually cheat yourself<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em>At 94, it won\u2019t be long before Greg Abel replaces me as CEO and will be writing the annual letters. Greg shares the Berkshire creed that a \u201creport\u201d is what a Berkshire CEO annually owes to owners. And he also understands that if you start fooling your shareholders, you will soon believe your own baloney and be fooling yourself as well.<\/em><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"159\" height=\"90\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2025\/02\/buffett_decide_ceo-Custom.jpg\" alt=\"Buffett decide on CEO\" class=\"wp-image-34461\"\/><figcaption class=\"wp-element-caption\">credit: Ideogram<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Relative_articles\"><\/span>Relative articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/04\/07\/how-buffett-decide-on-ceos\/\">How Buffett decide on CEOs?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/10\/18\/buffett-manage-berkshire\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does Buffett manage Berkshire?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-admin\/post.php?post=16354&amp;action=edit\"><\/a><a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/12\/31\/ceo-return\/\">The pros and cons of CEO returning, Boomerang CEO<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/06\/04\/shares-ceo-owns\/\">The more shares CEO owns, the higher stock return<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/03\/06\/founder-ceo-firms\/\">Founder-CEO firms stock shown better performance<\/a>&#8220;<\/li>\n\n\n\n<li><a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/10\/04\/underperforming-ceo\/\">&#8220;Why Can Underperforming CEOs Keep Their Jobs?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/05\/13\/investment-mistakes\/\">Investment mistakes Buffett made in his first 25 years<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/03\/07\/mistakes-of-omission\/\">Mistakes of omission and mistakes of commission<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/01\/18\/institutional-imperative\/\">Institutional imperative &#8211; the good, bad, and ugly<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/12\/30\/mergers-and-acquisitions\/\">Why most mergers and acquisitions end in failure?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/04\/07\/buffett-deserves-study\/\">Why Buffett deserves further study<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/27\/imitating-fastest-effective\/\">Imitating great investors is the fastest and most effective way<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/11\/07\/cigar-butt-investment\/\">Problems with Cigar Butt Investment<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/02\/04\/minority-stake\/\">Why Buffett prefers minority stake to entire company?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/02\/22\/berkshire-shareholder-letter\/\">Buffett&#8217;s 2025 Berkshire Shareholder Letter<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/02\/25\/2024-shareholder-letter\/\" target=\"_blank\" rel=\"noreferrer noopener\">Buffett&#8217;s 2024 Annual Shareholder Letter<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/02\/26\/2023-shareholder-letter\/\" target=\"_blank\" rel=\"noreferrer noopener\">Buffett&#8217;s 2023 Annual Shareholder Letter<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/05\/05\/2024-berkshire-shareholders-meeting-transcript-and-video\/\" target=\"_blank\" rel=\"noreferrer noopener\">2024 Berkshire shareholders meeting transcript and video<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/05\/09\/shareholders-meeting\/\" target=\"_blank\" rel=\"noreferrer noopener\">2023 Berkshire shareholders meeting transcript and video<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/02\/17\/charlie-munger-2023-djco\/\">Charlie Munger speaks at 2023 Daily Journal Shareholders Meeting<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/07\/26\/buffetts-first-tv-interview\/\">Buffett&#8217;s first TV interview<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/04\/17\/buffett-squawk-box\/\">Full transcript of Buffett&#8217;s interview with CNBC&#8217;s Squawk Box<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/11\/17\/outsiders\/\" target=\"_blank\" rel=\"noreferrer noopener\">Outsiders, one of the greatest investment books for managment team<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/12\/17\/dear-shareholder\/\">Dear Shareholder<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>In Buffett&#8217;s 2024 Berkshire Hathaway shareholder letter, I will now quote directly (in italics) some of the considerations he personally believes are important how buffett decide on CEOs?<\/p>\n","protected":false},"author":1,"featured_media":34461,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[222,1470,1336,206,11],"tags":[],"class_list":["post-34452","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ceo","category-company-management","category-critical-decision","category-management-team","category-buffett"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/34452","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=34452"}],"version-history":[{"count":9,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/34452\/revisions"}],"predecessor-version":[{"id":35739,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/34452\/revisions\/35739"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/34461"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=34452"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=34452"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=34452"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}