2022: Should CEOs take political stands?

JEFF VUVOLOY: Hi Warren and Charlie. I’m Jeff Vuvoloy (PH), shareholder from San Francisco.

In recent years, American companies have taken on a more active role in the political realm. Whether it is speaking out against specific bills, or promoting various social causes, often at the behest of shareholder or employee groups.

While the goals of these movements can be laudable, they risk alienating significant portions of customer and employee bases. How should CEOs decide which issues to take a stand on, or whether their companies should engage in the political realm at all? Thank you.

WARREN BUFFETT: That’s a terrific question, and that is one obviously I’ve had to think about plenty.

And at one point I said, “I don’t put my citizenship in a blind trust when I take the job as CEO of Berkshire.” But I’ve also learned that — you can make a whole lot more people sustainably mad than you can make temporarily happy by speaking out on any subject.

And on certain subjects, they will take it out on our companies, and that means that the people that are employed by us, some of them we would end up letting go. It means that the shareholders get hurt. And do I really think that it’s so important that I talk on every possible subject that people can get very upset about? Whether they should be asked to pay that price?

And I’ve come to the conclusion, the answer is no. Why in the world do I want to hurt the people in that other room that do all kinds of things for Berkshire. Why do I want to hurt you because I say something that 20% of the country is going to instantly disagree with, and sometimes they will be so upset about it that they will try and take it out.

And since they can’t scream at me, they may have campaigns against our companies or anything else. So I think, as it applies to me, I’m not going to go around and take positions where instead of saying, “Warren Buffett says,” it will say, you know, “Berkshire Hathaway,” or “Warren Buffett of Berkshire Hathaway.”

I get identified. And I do not want to make the lives of you — and I’ve just decided I’m not going to be doing that. And if I want to do that, I should quit my job. If I think my citizenship, speaking out is that important, I’ll give up what I love the most, which is having this job. (Laughs)

I don’t want to do that. So, I’ve decidedly backed off, I don’t want to say anything that’ll get attributed, basically to Berkshire, and have somebody else bear the consequences of what I talk about.

So that’s where I stand. And I can tell you that at most companies, or many — that isn’t fair. But in the great many companies, you know, CEOs, they have to think about what their board says to them, and they’ve made a point of electing people to their boards, because it’s socially acceptable, who represent different constituencies, sometimes very strongly.

And if they think their stakeholders, for this group and that group and that group, they’ll get pressured by their boards to take positions. And it’s just a territory that we’re not going to get into.

Charlie, how do you feel about that?

CHARLIE MUNGER: Well, even more than you, I have to be very careful about what I say. (Laughter)

Now — (Laughter)

MALE VOICE: Yeah. It’s — (Applause)

WARREN BUFFETT: And the difference between the two of us is I can’t resist saying a little more. (Laughter) I see headlines in papers, just time after time after time, that say, “Buffett’s buying such and such.” Well, I’m not buying such and such. Berkshire Hathaway is buying it, and it may be the work of two other people that work at Berkshire.”

And people who write the articles don’t have the faintest idea whether it was at my instigation or whether I’d even heard of it. But the headline will attract more people if it says, “Buffett buying this,” than if it says, “Berkshire Hathaway, and we don’t know whether it’s the people that work for him or him.”

The headline is designed to bring people into the story. So —

The confusion is terrible. And the easiest thing to do is to basically shut up and not have a bunch of people fascinating questions that they didn’t ask for in the first place.

But I’m glad you asked that question. That is a good question. And I probably thought more about that question than I think about whether this stock or that stock is cheap.