Warren Buffett’s retirement—and the twists and mysteries that preceded it
- In today’s CEO Daily: Diane Brady on Warren Buffett’s succession plan.
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Good morning. It’s a testament to Warren Buffett’s staying power that his retirement announcement this past weekend came as a shock. The Berkshire Hathaway CEO will be 95 at the end of August and most of us can agree that a well-planned transition is a better succession strategy than waiting for a CEO to die on the job. We’ve known that Greg Abel was set to take over as CEO for some time. (For more on Abel, check out Shawn Tully’s profile of him from earlier this year.)
There’s so much to admire about Buffett. I enjoyed talking to him years ago about our shared enthusiasm for Dale Carnegie’s How to Win Friends and Influence People. We both completed the training course. His track record speaks for itself. And he’s the gold standard for moral leadership when it comes to everything from paying taxes to investing in the next generation. He had a long and trusted friendship with Fortune’s Carol Loomis, who knows him better than any other journalist.
When it comes to handling succession, though, the reaction may be more one of relief than shock. Back in 2012, Buffett, then 81, disclosed in his annual shareholder letter that he had a designated replacement with “two superb back-up candidates.” The board knew the name, but the leader-in-waiting did not. What’s more, Buffett had no plans to retire, making this person less a successor than an emergency backup. At the time, I remember wondering about the logic of having the Berkshire CEO proclaim that an unnamed—and unknowing—insider was now poised to get a job he had no plans to give up.
Fast forward 13 years and the process this time was also not ideal. Abel and most of the board didn’t know Buffett was planning to make the bombshell announcement at Berkshire’s annual meeting. Buffett said his kids—Susie and Howard—were the only directors informed in advance. It’s never easy to replace yourself, which is why succession is a job for the board, not the CEO. At least the guessing game is finally over. For a man who’s done so much right over his career, it’s good to finally have a clear succession plan.
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Contact CEO Daily via Diane Brady at diane.brady@fortune.com
This story was originally featured on Fortune.com