OMAHA, Neb. – Don’t be a lemming.
That, in short, is Warren Buffett’s warning to top executives at his company, Berkshire Hathaway Inc.
In a Sept. 27 memo, Buffett cautioned managers that many corporate scandals arise because questionable activity is accepted as normal behavior.
He said the rationale that “everyone else is doing it” is not acceptable. Rather, it should raise a red flag.
“Somewhere along the line they picked up the notion … that a number of well-respected managers were engaging in such practices and therefore it must be OK to do so,” Buffett wrote. “It’s a seductive argument.”
The memo comes on the heels of the latest corporate scandal: the former chairwoman of Hewlett-Packard is being investigated on charges she violated state privacy laws when probing her board for leaks to the press.
Buffett acknowledged that it is inevitable that someone in a company the size of Berkshire Hathaway would give in to temptation. He called on his top executives to resist improper behavior and head off such behavior in their employees.
“Berkshire’s reputation is in your hands,” Buffett wrote.
Berkshire Hathaway owns a diverse mix of more than 60 companies, including insurance, reinsurance, carpet, jewelry, furniture, restaurants and utility firms. And it has major investments in such companies as H&R Block Inc., Anheuser-Busch Cos. and Coca-Cola Co.
Its companies employ almost 200,000 workers.
The recent ethics lesson is nothing new for Buffett.
“Every couple of years for the past 15 or 20 years, he has been sending out memos to our Berkshire subsidiaries,” Buffett’s spokeswoman Debbie Bosanek said Tuesday.
This is necessary, she said, because Berkshire Hathaway continues to acquire new companies and works with new people in top positions.
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