102 THE WARREN BUFFETT WAY
Buffett says, “came, in very large part, from the superior nature of the
managerial decisions made by Kay [Katherine Graham] as compared to
those made by managers of most other media companies.”^22
Katherine Graham had the brains to purchase large quantities of the
Post’s stock at bargain prices. She also had the courage, he said, to con-
front the labor unions, reduce expenses, and increase the business value
of the paper. Washington Postshareholders are fortunate that Katherine
Graham positioned the company so favorably.
WARREN BUFFETT ON MANAGEMENT, ETHICS,
AND RATIONALITY
In all his communications with Berkshire shareholders, and indeed with
the world at large, Buffett has consistently emphasized his search for
honest and straightforward managers. He believes that not only are
these binding corporate values in today’s world, they are also pivotal is-
sues that determine a company’s ultimate success and prof itability in
the long term. Executive compensation, stock options, director inde-
pendence, accounting trickery—these issues strike a very personal chord
with Buffett, and he does not hesitate to let us know how he feels.
CEO Avarice and the Institutional Imperative
In his 2001 letter to shareholders, Buffett wrote, “Charlie and I are dis-
gusted by the situation, so common in the last few years, in which share-
holders have suffered billions in losses while the CEOs, promoters and
other higher-ups who fathered these disasters have walked away with
extraordinary wealth. Indeed, many of these people were urging in-
vestors to buy shares while concurrently dumping their own, sometimes
In evaluating people, you look for three qualities: integrity,
intelligence, and energy. If you don’t have the f irst, the other
two will kill you.^23
WARRENBUFFETT, 1993