Berkshire Hathaway
Berkshire Hathaway is an American multinational conglomerate holding company that oversees and manages various subsidiary companies (Berkshire Hathaway, 2011). The current members of the Board of Directors are Warren Buffett, Charlie Munger, Walter Scott Jr., Thomas Murphy, Howard Graham Buffett, Ronald Olson, Donald Keough, Charlotte Guyman, David Gottesman, Bill Gates, Stephen Burke, and Susan Decker (Berkshire Hathaway Inc., 2011). The primary job of the Board of Directors is to see that the right people are running the business and to be sure that the next generation of leaders is identified and ready to take over tomorrow (Berkshire Hathaway, 2011). Another important duty of Board of Directors is to ensure that there is maximization of the shareholder value and their investments hold value long-term.
At Berkshire Hathaway, managers of the business units are responsible for day-to-day operations for the various Berkshire businesses. Chief Executive Officer (CEO) Warren E. Buffett along with vice president Charles Munger handles the investment decisions and all other capital allocation decisions for Berkshire and its subsidiaries. One of Berkshire Hathaway’s strengths is notable in the fact that they never split their Class A shares, which helps contribute to their high per-share price (Berkshire Hathaway, 2011). The refusal to split the stock is due to their desire to attract long-term investors, as opposed to short term.
Upon reviewing their proxy statement, the Board of Directors displays no ethical issues that warrant concern. Their objectives and goals are straightforward, and they disclose information about investments have not done what they predicted. The Chief Executive Officer (CEO) and senior management of the organization’s major businesses disclose potential risks to the board twice a year and once a year respectively. In addition, an audit committee reviews the policies with respect to risk assessment and management.
Financial
At Berkshire Hathaway, managers of the business units are responsible for day-to-day operations for the various Berkshire businesses. Chief Executive Officer (CEO) Warren E. Buffett along with vice president Charles Munger handles the investment decisions and all other capital allocation decisions for Berkshire and its subsidiaries. One of Berkshire Hathaway’s strengths is notable in the fact that they never split their Class A shares, which helps contribute to their high per-share price (Berkshire Hathaway, 2011). The refusal to split the stock is due to their desire to attract long-term investors, as opposed to short term.
Upon reviewing their proxy statement, the Board of Directors displays no ethical issues that warrant concern. Their objectives and goals are straightforward, and they disclose information about investments have not done what they predicted. The Chief Executive Officer (CEO) and senior management of the organization’s major businesses disclose potential risks to the board twice a year and once a year respectively. In addition, an audit committee reviews the policies with respect to risk assessment and management.
Financial
References: Berkshire Hathaway. (2011) Proxy Statement. Retrieved from http://www.berkshirehathaway.com/2011ar/2011ar.pdf Berkshire Hathaway. (2011) 2011 Annual Report. Retrieved from http://www.berkshirehathaway.com/reports.html Berkshire Hathaway Inc. (2012) Annual income statements and balance sheets. Retrieved from http://www.hoovers.com/company/Berkshire_Hathaway_Inc/rftfji-1-1nji3j-1njhft.html Berkshire Hathaway Inc. (2012) 10-Q Form. http://www.sec.gov/Archives/edgar/data/1067983/000115752312002551/a50258446.htm#earn Codjia, M. (2012) Long-term capital expenditure budgeting in a quarterly process. Retrieved from http://www.ehow.com/info_8468105_longterm-expenditure-budgeting-quarterly-process.html Investopedia. (2012) Capital asset pricing model. http://www.investopedia.com/terms/c/capm.asp#axzz1wkS7dCbr Leucadia National Corporation. (2012) Annual report 2011. http://www.leucadia.com/10k_docs/luk_10k_2011.pdf Ross, S. A., Westerfield, R. W., & Jaffe, J. (2010). Corporate Finance. New York, NY: McGraw-Hill/Irwin. Stock Pup. (2012) Berkshire Hathaway Inc DuPont Identity. http://www.stockpup.com/companies/BRK.A/#a-dupont The Wall Street Journal (2012). Annual financials for Berkshire Hathaway Inc. Retrieved from http://www.marketwatch.com/investing/stock/brk.b/financials/balance-sheet Triantis, A. (2005) Realizing the potential of real options: does theory meet practice? Journal of applied corporate finance