
Berkshire Hathaway Code of Business Conduct and Ethics [pdf] - artsandsci
http://www.berkshirehathaway.com/govern/ethics.pdf
======
traskjd
Interestingly, at the AGM this weekend, Warren noted that they receive over
4,000 reports through their BRK hotline per year. He commented that most are
not actionable, but that they have made significant investigations and changes
based on what has been reported through the hotline.

Edit: Added that it was 4k _per year_.

~~~
fiftyacorn
would be interesting to see it broken down by company

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dharmon
I wonder how many are pissed off NetJet union members?*

*NetJet (a Berkshire subsidiary) has been in a labor battle, with employees outside protesting the meeting this past weekend.

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tanderson92
Why do you describe them as pissed off? Simply because they use their rights
to battle for better working benefits? This snide characterization of
unionized labor undermines all workers' efforts at fair compensation.

~~~
dharmon
Calling someone "pissed off" makes no value judgment about them being right or
wrong, it just describes their emotional state.

I would describe the citizens of Flint, MI as "pissed off", and rightly so.
Would you say that description is undermining their efforts to right past
wrongs?

If I were you I would hesitate to make such hasty accusations.

~~~
wmeredith
Eh, maybe, maybe not. Language is powerful. Replaced the "pissed off"
descriptor in that sentence with "shafted" or "fucked over" and it
dramatically shifts the narrative.

~~~
TheSpiceIsLife
That may be so, but the words used were "pissed off" and not any of the wildly
different examples you've provided which dramatically change the narrative.

~~~
tanderson92
That's the point. The ones he provided indicate the workers have merit while
pissed off is quite close to disgruntled.

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socrates1998
Why is this relevant? Am I missing something?

Isn't this just typical corporate jargon?

~~~
hackuser
Buffet did just make headlines by criticizing the CEO of Well Fargo, of whom
Berkshire Hathaway is the largest shareholder, for their poor handling of the
fake account scandal. Perhaps that's why Berkshire's code of conduct is
attracting interest.

[https://www.bloomberg.com/news/articles/2017-05-06/buffett-s...](https://www.bloomberg.com/news/articles/2017-05-06/buffett-
says-wells-fargo-totally-wrong-in-approach-to-scandal)

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CPLX
The startup crowd has a hard time with a lot of these, especially the
"Corporate Opportunities" one. So much so that I'd venture a guess that many
are unaware that legally that's a pretty fundamental responsibility for a
principal/officer of a corporation.

~~~
gumby
I don't see why you think that's the case. It's pretty typical language in an
offer letter in California and is even specifically called out as legit in the
part of the California code that prohibits non-competes.

And Waymo seems pretty pissed over a violation of this term. The theft of
secrets issue was just the trigger.

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themgt
Warren Buffett is one of the world's most brilliant and skilled virtue-
signaling crony, rentier capitalists.

[https://www.publicintegrity.org/2015/04/03/17024/warren-
buff...](https://www.publicintegrity.org/2015/04/03/17024/warren-buffetts-
mobile-home-empire-preys-poor)

[https://www.thenation.com/article/shelters-clinton-
built/](https://www.thenation.com/article/shelters-clinton-built/)

 _However, when Nation reporters visited the "hurricane-proof" shelters in
June, six to eight months after they’d been installed, we found them to
consist of twenty imported prefab trailers beset by a host of problems, from
mold to sweltering heat to shoddy construction. Most disturbing, they were
manufactured by the same company, Clayton Homes, that is being sued in the
United States for providing the Federal Emergency Management Agency (FEMA)
with formaldehyde-laced trailers in the wake of Hurricane Katrina. Air samples
collected from twelve Haiti trailers detected worrying levels of this
carcinogen in one, according to laboratory results obtained as part of a joint
investigation by The Nation and The Nation Institute’s Investigative Fund._

~~~
ReligiousFlames
If he truly cared so much about equality, he'd spend zillions to lobby
Congress to massively raise taxes on the rich, publicly-finance political
campaigns, commit to real climate change policy, enact single-payer healthcare
and address broken justice and mental healthcare systems with reform and
compassion of investing in citizens and the public commonwealth.

Sure his giving some capital to B&MGF seems like a noble deed, but it doesn't
go far enough to change the world for the better in desperately vital ways
given his assets, influence and capabilities.

Buffett might live in a tiny house in Nebraska and try to seem a "good guy,"
but actions ultimately speak louder than words. That might seem
harsh/entitled/demanding but a few people like him control trillions of
dollars and the politics of many countries (which is also partly our fault for
not opposing these conditions and demanding a fairer division of
profits/labor/representation.), he's in a much better position to act instead
of "standing around" as if he's stuck in an economic "bystander effect."

~~~
golergka
> If he truly cared so much about equality, he'd spend zillions to lobby
> Congress to massively raise taxes on the rich

Why the talk about "equality" always comes down to forcibly taking other
people's money?

~~~
linschn
I'll bite.

Because capitalism is a system in which the rich get richer. This preferential
accumulation of wealth where wealth already is is an inherent feature of
capitalism.

The same kind of phenomenon can be seen in the population of cities for
example: the more people there are in a city, the more other people are likely
to move there.

If you want to know more about this, see, e.g. Picketty
([https://en.wikipedia.org/wiki/Capital_in_the_Twenty-
First_Ce...](https://en.wikipedia.org/wiki/Capital_in_the_Twenty-
First_Century))

Also, profound inequality is bad for growth (The IMF says so,
[https://www.imf.org/en/Publications/Staff-Discussion-
Notes/I...](https://www.imf.org/en/Publications/Staff-Discussion-
Notes/Issues/2016/12/31/Causes-and-Consequences-of-Income-Inequality-A-Global-
Perspective-42986)): "when the rich get richer, benefits do not trickle
down.".

So given that there is a runaway feedback loop that make the rich get richer
faster than the poor get richer, and given that profound inequality is
detrimental to the economy at large, it logically follows that there must
exist some scheme to redistribute a part of the wealth of the extra-rich to
the rest of society.

Taxation is (or should be) such a shame.

Note that there is no moral argument here. No finger pointing, no entiltement.
Just a systemic view of things: it is detrimental to all to let a runaway
feedback loop increase inequalities.

~~~
valuearb
Except that huge inequalities exist in socialistic economies as well, and
capitalism means the middle class of today live as well or better than the
richest people in the world did in the 1920s.

~~~
linschn
I am not advocating switching to a planned economy. I'm just pointing out that
any capitalistic system has a tendency to concentrate wealth.

I even acknowledge that the poor are getting richer. The problem is just that
they are getting richer at a slower pace than the rich, and unless this
problem is addressed through taxation, then it will lead to economic
stagnation or worse.

~~~
valuearb
If you want to address concentrated wealth address the tax system and real
crony capitalism (not the fake kind that is used to slur Buffett). Eliminate
patents, tariffs, tax businesses that receive government subsidies, etc.

Competition is the best bar to too much competition.

~~~
linschn
While I also long for the elimination of some of the things you list (mainly
patents), I want to emphasize that even in a perfectly competitive and ideal
market, the phenomenon of preferential wealth accretion would still happen.

Picketty's explanation is that capital's reward is higher than work's, but I'm
not bent on defending that explanation (even if until a better one comes up,
I'll stick to Picketty's).

As far as I know there is no counter example of the phenomenon itself
(whatever the underlying reason is).

~~~
valuearb
You can't stop some people from working harder or smarter than others, or
saving money instead of spending everything they make. Those people will
accumulate wealth far faster over time.

~~~
linschn
That is where you are mistaken. The people who will accumulate wealth the
fastest over time are the people who already have wealth.

Even statistical anomalies like Bill Gates or Steve Jobs got more money, once
they became slightly rich, from the capital they owned than from the work they
produced.

~~~
valuearb
Only because they didn't consume their capital, they kept it reinvested, and
kept working. There have been thousands of business owners who could have
become billionaires, but traded too much of their equity for a big house and
expensive distractions.

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elihu
This seems like a pretty standard Code of Conduct.

------
_yosefk
Anything about unsound investments which are nevertheless likely to be bailed
out and so have a great expected ROI? Tax evasion by taking companies off the
stock market and canceling dividends?

That Berkshire's code of ethics is linked here is an amazing PR achievement,
rivaling such jewels as the one-time potent "Don't be evil" (actually beating
this one hands down as it has worn out even though Google didn't get $billions
of bailout money.)

~~~
tc313
How does acquiring a public company evade taxes?

~~~
lefstathiou
Ha, I believe I know what the parent meant. Technically by not distributing a
dividend that would otherwise been paid the government does not collect on the
taxes that would have been due had the dividend been paid. I see how one could
stretch this to consider it "evasion" As the government has not collected
taxes by there are a zillion obvious offsets to factor in here that make this
a bit of a silly point to make.

~~~
11thEarlOfMar
Taxes are paid by the corporation before they pay dividends. Paying dividends
does not reduce a corporations tax liability.

~~~
lefstathiou
Correct - apologies for not being clear... if I own a business and receive a
dividend, I pay taxes. So that same income was taxed first at the corporate
level and second at the personal level. THe evasion - which I consider to be a
stretch here - is that by not paying a dividend it becomes trapped in retained
earnings and the government doesn't receive its second piece.

I'm not saying I agree with the view here but the point is technically
correct. A $100 of profit for Apple in the us is taxed 40% at corporate level
to become $60 and by the time it gets to me it is worth 32

~~~
sokoloff
Not paying a dividend isn't remotely tax _evasion_ , IMO.

It's barely even tax _avoidance_...

~~~
ska
You two are agreeing.

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mudil
Berkshire hires 3G Capital to do the dirty work of layoffs and cost cuttings,
because you know, BRK is an ethical business.

~~~
traskjd
How is remaining inefficient the ethical outcome?

You know what's worse than a few people losing their jobs? Everyone losing
their jobs because a competitor is more efficient and drives you out of
business.

~~~
chrisbennet
The choice isn't (always) "lay off some workers or go out of business".
Instead it's "It's profitable now but it could be _even more_ profitable if we
did something that incurred job losses."

For example, Carrier was already very profitable when they decided to
outsource to Mexico.

[http://www.salon.com/2016/03/22/snapshot_of_a_broken_system_...](http://www.salon.com/2016/03/22/snapshot_of_a_broken_system_how_a_profitable_company_justifies_laying_off_1400_people_moved_their_jobs_to_mexico/)

 _" A look at United Technologies’ annual report reveals even more good news:
Commercial and industrial products, Carrier’s category, make up over half of
UTC’s $56 billion in net sales. Climate, Controls & Security had 3 percent
growth in 2015, the highest in the company; it was the only division to
increase its profit margin year-over-year. “Organic sales growth at UTC
Climate, Controls & Security was driven by the U.S. commercial and residential
heating, ventilation and air conditioning (HVAC) and transport refrigeration
businesses,” according to page 14 of the report. In other words, air
conditioners – what the workers are making in Indianapolis – drove the growth
of the best-performing facet of United Technologies’ business."_

~~~
golergka
> "It's profitable now but it could be even more profitable if we did
> something that incurred job losses."

If keeping someone's employed is making the company less profitable than it
could be if it fired him - why would the company keep paying this person
money?

~~~
adventured
The argument being presented, is that a job is - to one degree or another - a
right or entitlement. The argument is: while yes, that job is of low
productive output and it may be questionable as to whether it serves any
purpose or needs to exist, it employs someone and therefore should exist
specifically for that employee's benefit as opposed to the benefit of the
owner of the business who provides said job.

That's an emotional argument without any factual or rational merit to support
it. It's meant to arrange the 'working class' as the rulers of the means of
production. Standard labor vs capital debate.

~~~
chrisbennet
No, a job is not a right or entitlement, but then again, that wasn't my
argument. In the case of Carrier, they were trying to move part of their _most
profitable_ divisions to Mexico. It wasn't a case of employing people for
charity, it was literally a case of adding more zeros to an already fat bank
account.

~~~
golergka
> It wasn't a case of employing people for charity, it was literally a case of
> adding more zeros to an already fat bank account.

I don't understand, why is adding zeroes to already fat bank account is
morally different from pulling the account from negative to positive?

~~~
chrisbennet
I'm not understanding, could you clarify? Thx. Oops, I think we're too far
down the rabbit hole for "reply" to work. I'll take a stab at answering but
forgive me if I'm answering the wrong question.

When a business is losing money, paying employees is a charity. When the
business is making a great profit and decides that it could make even more by
hurting/laying off some employees, that is a choice with moral implications.

When there is plenty of ice cream bars for everyone but the first guy who
arrives at the cafeteria grabs all of them out of the freezer and proceed to
sell them to everyone who comes later, the first guy didn't _earn_ them. He
didn't actually increase the amount of ice cream. He only _captured_ the
value.

It _is_ possible to not grab every single ice cream bar especially when you
have more than you can ever eat. People and companies do this all the time. As
a businessman, I don't find it necessary to screw every other party in a
transaction in order to feel successful.

~~~
valuearb
None of this addresses the question. We have the highest standard of living in
history because businesses relentlessly increased productivity, in both good
and bad years, and this eliminated unneeded low value jobs. It also creates
more valuable new jobs.

If they hadn't done so, 95% of Americans would still be doing brutal farm
labor.

