Buffett hosts unfriendly "Woodstock for Capitalism"
29 Apr, 2011 16:10
Tens of thousands of Berkshire Hathaway shareholders are meeting in Omaha, Nebraska for the company’s annual meeting – but the topic of focus will likely be the behavior of top corporate executives.
Warren Buffett’s “Woodstock for Capitalism” may focus less on capitalism and business and more on internal corporate politics. The Berkshire board recently released a statement berating David Sokol, a former executive and Buffett’s right hand man, for his impromptu resignation and questionable investment practices. The statement was an attempt to fully exonerate Buffett himself, but left many questions in the minds of shareholders. "I think he's dotted his I's and crossed his T's from a legal standpoint but not much more than that. That's sad for Warren Buffett, because I think he believes the statements that he makes," Paul Argenti, professor at the Tuck School of Business at Dartmouth College told Reuters.He added, "He's the best and I expect the best from him, and I think that's why everyone is so disappointed." An internal audit of Sokol’s performance at Berkshire was released by the board which suggests Sokol misled the company and Buffett about his personal interests and outside investments in Lubrizol Corp."With one quick disclosure, Berkshire is essentially agreeing with the public and the press and pinning the blame entirely on Sokol," said Jay Brown, a law professor at the University of Denver.The annual Berkshire meeting is traditionally a Buffett love fest full of pro-capitalism rhetoric and happy faces. The recent report and onslaught of scandalous issues has changed that. Buffett and other executives will likely face tough questions as opposed to admiration – even though the internal report placed the blame solely on Sokol.