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Tags: warren buffett | bill gates foundation | melinda

Buffett Warned Gates Foundation CEO of Cockiness, Red Tape, Self-Satisfaction

Buffett Warned Gates Foundation CEO of Cockiness, Red Tape, Self-Satisfaction
Warren Buffett, CEO of Berkshire Hathaway. (Johannes Eisele / AFP via Getty)

By    |   Saturday, 10 July 2021 11:05 AM

Warren Buffett during a meeting with the new CEO of the Bill and Melinda Gates Foundation warned that the greatest threat to the non-profit was cockiness, red tape, and self-satisfaction.

Mark Suzman replaced Sue Desmond-Hellmann in December of 2019. He visited with Buffett soon after to have lunch and seek his guidance, reports Business Insider.

"He told me then that my most important job was to guard against the 'ABC' risks of decay that all very large organizations face: arrogance, bureaucracy, and complacency," Suzman wrote in an email to the foundation's employees.

Buffett, whose Berkshire Hathaway fund has gifted the foundation $33 billion, had warned about these factors in the past. He resigned as the foundation's trustee in June after news of the Gates' divorce. 

In 2006, Buffett pledged to donate 99 percent of his wealth to the Gates Foundation along with four other foundations. However, his advice to Suzman isn't surprising, considering he gave the same advice in a 2014 shareholder letter that outlined this as the primary responsibility for his replacement when he steps down from his Berkshire CEO position.

"My successor will need one other particular strength: the ability to fight off the ABCs of business decay, which are arrogance, bureaucracy and complacency," Buffett said. "When these corporate cancers metastasize, even the strongest of companies can falter."

Buffet pointed to General Motors, IBM, Sears Roebuck, and US Steel, which ruled as titans in their industry.

"The destructive behavior I deplored above eventually led each of them to fall to depths that their CEOs and directors had not long before thought impossible," he added.

Buffett noted that building a company based on trust was an "ideal antidote to beuracracy." Berkshire also saved money by not having HR, PR, IR, legal, acquisitions in its headquarters, he mentioned.

In Buffett's 2009 letter, he spoke to the "B" of his philosophy.

"We would rather suffer the visible costs of a few bad decisions than incur the many invisible costs that come from decisions made too slowly - or not at all - because of a stifling bureaucracy," he said.

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Warren Buffett during a meeting with the new CEO of the Bill and Melinda Gates Foundation warned that the greatest threat to the non-profit was cockiness, red tape, and self-satisfaction.
warren buffett, bill gates foundation, melinda
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2021-05-10
Saturday, 10 July 2021 11:05 AM
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