“Legal is about what we can get away

with, ethical is about what is right”

Warren Buffett
 Who is Warren Buffett???
•Warren Edward Buffett is an American Investor,
Industrialist and Philanthropist.
•One of the most successful investors in the world
and third richest man in the world.
• He is the primary shareholder, chairman and CEO
of Berkshire Hathaway
• Buffett is called the “Oracle of Omaha” or the
“Sage of Omaha”
 Life History
• Born on 30th august 1930 in Omaha

• Chairman and CEO of Berkshire Hathaway

• Worlds wealthiest person in 2008 and the 3 rd in

2011
 Life history cont..
• Buffet as a kid went for selling chewing gum, coca
cola, newspapers.
• Started investment when he was in his age of 11.
• In 1945, in his sophomore year of high school,
Buffett and a friend spent $25 to purchase a used
pinball machine, which they placed in the local
barber shop. Within months, they owned several
machines in different barber shops.
• Warren Buffett was employed from 1951–54 at
Buffett-Falk & Co as an investment sales person
• From 1954–1956 at Graham-Newman Corp.,
New York as a Securities Analyst
• 1956–1969 at Buffett Partnership, Ltd., Omaha
as a General Partner
• 1970 – Present at Berkshire Hathaway Inc,
Omaha as its Chairman, CEO.
 Berkshire Hathaway
• In 1970, as chairman of Berkshire Hathaway,
Buffett began writing his now-famous annual
letters to shareholders
• Buffett became a billionaire when Berkshire
Hathaway began selling class A shares on May
29, 1990
 Ethical Leadership
His instructions to his employees at Berkshire
“……Let us start with what is legal, but always
go on to what we would feel comfortable
about being printed on the front page of our
local page and never proceed forward simply
on the basis of the fact that other people are
doing it……..”
What makes Buffet different from others?

• He is known for his adherence to the value

investing philosophy and for his personal
frugality despite his immense wealth.
• Buffett is also a notable philanthropist, having
pledged to give away 99 percent of his fortune
to philanthropic causes, primarily via the Gates
Foundation.
• He always did his business in the most ethical
way
• He is conservative in business and
appearance.
• He is liberal at heart, which contrast him
sharply with his peers
• He founded Glide foundation together with his
wife Susan Thompson
 Leadership in personal life
• W. Buffett is a simple man, he lives in his old house,
drives his car himself and avoids all luxuries of life
• He pledged to give away all his wealth philanthropy.
• He joined the “Giving Pledge” a movement aimed at
encouraging the wealthiest people to donate some
portion of their wealth for charity.
• Now he travels around the world to promote Giving
Pledge along with Bill and Melinda Gates
• In 2011 W.Buffet and Bill Gates are coming to india
 CSR
• In 2006 he gave $37 billion worth of shares in
his firm, Berkshire Hathaway, to five charitable
foundations. The largest recipient (receiving
some $31 billion) will be The Bill & Melinda
Gates Foundation, which specializes in global
health and education projects
• Unlike the large majority of companies, Buffett
believed that it was inappropriate for a
company to direct its charitable giving to the
pet causes of the board of directors.
• Instead, he established a system whereby
shareholders of the company could allocate
their proportionate share of the company's
giving to go to whatever charitable
organizations they deemed fit.
 Leadership Style
• New Organization
Motivates Managers to think like owners
• Personal Influence
Managers can contact him personally incase
they face any difficulties in business
• Delegation of Jobs
Gave managers power to think creatively and
to increase productivity.
 Berkshire Hathaway - Salomon Brothers
controversy
• Berkshire Hathaway had acquired a 12% interest in the investment
bank Salomon Brothers in 1987, and news came out in 1990 that a
rogue trader had submitted bids in excess of Treasury rules and
that the CEO at the time (John Gutfreund) had failed to discipline
the trader.
• The U.S. government threatened to come down hard on Salomon
and John Gutfreund.
• Warren Buffet directly intervened with the Treasury department to
quickly reverse a ban on Salomon bidding in government bond
auctions, a move that would have crippled the investment bank. He
also stepped in to run the bank for a time, and despite a $290
million fine levied on Salomon, Berkshire Hathaway ultimately saw
its stake more than double when Travelers bought Salomon in 1997
 Berkshire Hathaway - AIG Controversy
• In 2006 Berkshire Hathaway subsidiary General Re had
cooperated with AIG in engaging in so-called finite
reinsurance.

• Finite reinsurance was not really insurance as such (with a

corresponding transfer of risk), but more of an accounting
gimmick that allowed a company like AIG to buff the
appearance of its financial reports for a period of time.

• While the government aggressively pursued AIG and its

chairman at the time, Hank Greenburg, Berkshire Hathaway
did not escape unscathed. The company paid a $92 million
settlement and promised some changes to corporate
governance practices.
• Berkshire Hathaway made several
opportunistic investments amidst the depths
of the recession and credit crisis on terms that
were very advantageous to Berkshire.
Presented by
Group 1
Abey Jacob
Abey Mathew Koshy
Aneesh Sudhesan
Anish Thomas
Ann Mary Paul
Joma George
Susmitha V