David Sokol resigns to Berkshire Hathaway

Wall Street Journal

By Serena NG and Erik Holm

David Sokol, widely seen as the leading contender to succeed billionaire Warren Buffett at the helm of Berkshire Hathaway Inc., resigned unexpectedly amid surprising revelations about his personal stock trading.

In an unusual and personal announcement, Mr. Buffett said the resignation followed revelations that Mr. Sokol had purchased shares of a company that Berkshire recently bought, Lubrizol Corp., at the initial suggestion of Mr. Sokol.

Mr. Buffett said Mr. Sokol, 54 years old, had bought roughly $10 million in shares of the chemicals maker in January, before Berkshire reached a $9 billion deal to acquire the company. Berkshire's purchase price of $135 per share meant that Mr. Sokol's stake rose $3 million in value.

Mr. Buffett said he and Mr. Sokol didn't feel the Lubrizol purchases were "in any way unlawful." The Securities and Exchange Commission declined to comment.

The Berkshire chairman and chief executive said the purchases weren't a factor in Mr. Sokol's decision to leave. He said Mr. Sokol, in a March 28 resignation letter, cited his desire to spend more time on his family's investments.

The revelations throw into question Mr. Buffett's carefully crafted succession plan, one of America's most widely watched boardroom dramas. Berkshire has said it has identified four executives at the company who could replace him. Mr. Sokol has long been considered high on that short list.

The incident is also a potential black eye for Mr. Buffett, 80, who emphasizes character and integrity in his manager choices and who himself is known for his ethics. Shares of the conglomerate, one of the nation's biggest companies, declined in after-hours trading. The development comes amid questions about trading by senior members of corporate America.

This month, regulators alleged that Rajat Gupta, one of the nation's most widely respected corporate directors, shared inside information with hedge-fund king Raj Rajaratnam, an allegation both men deny.

Mr. Buffett said he had been aware Mr. Sokol owned stock in Lubrizol, but only found out about the timing and size of the trades on March 19—a few days after Berkshire agreed to buy Lubrizol at a 28% premium to its share price before the deal. In an interview Wednesday evening, Mr. Sokol said his resignation "had absolutely nothing to do" with Lubrizol, and said the company elected to disclose his trades before they appeared in a proxy statement in the coming weeks.

"This was 100% my decision," Mr. Sokol said. He said he had contemplated leaving Berkshire for the past three years and had told Mr. Buffett that he wanted to hand over management of the companies he ran "when the timing was right."

Mr. Sokol was chairman of Berkshire utility subsidiary MidAmerican Energy Holding Co. and chief executive of its fractional jet business NetJets Inc. He had identified Lubrizol as a potential acquisition for Berkshire late last year and took the early lead on the deal, which Mr. Buffett eventually closed, according to a recent company filing on the deal.

In his initial conversation with Mr. Buffett about the company, Mr. Sokol mentioned he owned stock in Lubrizol, Mr. Buffett said Wednesday. "It was a passing remark and I did not ask him about the date of his purchase or the extent of his holdings," he wrote.

Mr. Sokol brought the idea for buying Lubrizol to Mr. Buffett in mid-January. Just days earlier, on Jan. 5, 6 and 7, he bought 96,060 shares in the company. This followed trades of 2,300 Lubrizol shares Mr. Sokol had bought and sold in December, according to Mr. Buffett's announcement. Mr. Buffett said he learned of the extent of the stock purchases shortly before beginning a trip to Asia on March 19.

On Lubrizol, Mr. Sokol said he "had no inside information and no knowledge if Warren would be interested or not in the company" at the time he bought the shares and when he brought the company to Mr. Buffett's attention.

"There's nothing in there that's embarrassing," Mr. Sokol said, though he acknowledged "it would look bad 60 days later" if his stake in Lubrizol was disclosed in public filings and Berkshire hadn't said anything about it. "We wanted it all out." He said the analysis he did on Lubrizol was "done off public information."

Mr. Buffett, he said, didn't ask him about the stake he held and found out about its details only when Mr. Sokol submitted the information to Berkshire's general counsel, who was helping to prepare regulatory filings for the deal.

"I have been a CEO for 27 years in two companies, and my interest is in growing companies," he said, adding his goal is to build an entity of his own that's similar to Berkshire.

Securities lawyers debated whether Mr. Sokol's dealings could fall into a gray legal area. In broad terms, insider trading laws prohibit individuals from trading on shares based on material non-public information in violation of some duty of trust.

One key question, lawyers say, is whether Mr. Sokol knew that he would pitch a Lubrizol deal to Mr. Buffett, or even that he might do so, at the time he bought Lubrizol shares. If Mr. Sokol did know at that time, that could suggest he had material information at the time he bought the shares, because Mr. Sokol is a trusted Buffett lieutenant, lawyers said.

However, it could be harder to show that Mr. Sokol violated any duty to Berkshire Hathaway, because he told Mr. Buffett that he owned Lubrizol shares, the lawyers said. Scrutiny could more likely focus on whether Mr. Buffett made a mistake by not learning more about Mr. Sokol's Lubrizol stake when weighing a decision to pursue a deal.

Buffett’s Secret Deal Recipe

Dealpolitik: Exposing Warren Buffett’s Secret Deal Recipe

By Ronald Barusch

If KKR or TPG had called Lubrizol with a “Let’s Make a Deal” phone call, the board would have immediately formed an independent committee and hired independent financial advisors before pursuing it. If one of Lubrizol’s competitors had made the same call, it would likely have received a very strong message that the company is not for sale and they should go away. We used to characterize that kind of a message as “[expletive deleted] you; stronger message to follow.”

But when Berkshire called, according to the background section of Lubrizol’s preliminary proxy statement, everyone seemed to slobber all over himself to play the game the Berkshire way. No independent committee was created. The board even hired as a financial advisor the banker who brought Lubrizol to Berkshire’s attention. And a strange courtship began. How come? We will come back to that question in a moment.

First, let’s look at how strange this dance seems to be. If a rich guy called you saying he wanted to buy your house, what would be the first thing you would ask? I would ask “how much?” Well, apparently that kind of common sense doesn’t apply when Berkshire comes knocking at your door. Between December 17, when Lubrizol’s CEO first learned of Berkshire’s interest, and February 8, when the CEO met with Warren Buffett himself, no one asked Berkshire the simple question “how much?”

During that period, there were four formal and informal board meetings. During at least two of those meetings the board “engaged in an extensive and thorough discussion about Berkshire Hathaway’s possible interest.” No one seems to have wanted to ask Berkshire the big question. The board even asked management and its financial advisors to assess “the value that might be achieved through negotiations with Berkshire Hathaway.” But Berkshire was not asked the “how much?” question until the CEO met with Buffett on February 8.

There is little question that Berkshire received more favored treatment that another bidder would have. To some extent, that is understandable. Berkshire has an impressive balance sheet. But the favoritism toward Berkshire seems much deeper rooted than that. In the preliminary proxy statement it is signaled in code words that describe a meeting in mid-January between the CEO and David Sokol of Berkshire. The two of them “generally discussed the corporate cultures and philosophies” of both companies.

And in a meeting 10 days later when Sokol provided reassurance by saying Berkshire “would want Mr. Hambrick to continue to run the business.” The preliminary proxy repeatedly assures us that no employment terms were discussed. But of course they did not need to be. The Berkshire “culture” of retaining and rewarding existing management is well known and was obviously affirmed.

And, of course management does not have to completely rely on history and the soothing words of Berkshire executives. They have generous golden parachutes that will compensate executives with an aggregate of $100 million if they leave Lubrizol for “good reason” within three years of the Berkshire deal. That’s on top of the equity-based cash outs they will receive at the closing. More importantly, they know that, because of the “culture,” the bulk of those golden-parachute payments likely will be rolled into new employment agreements to compensate them nicely them for staying.

But of course no one wants to admit that Berkshire received favored status because of the “culture” issue. That is because it leads to this question: how does a deal with Berkshire differ from a leveraged buyout sponsored by a private equity fund?

Leveraged buyouts, which are frequently criticized because of the inherent self-interest of management, require much more procedural protections than the Lubrizol board decided would be appropriate for a Berkshire transaction. They typically involve independent committees, independent advisers, executive sessions and negotiations largely conducted by the committee. It is true that leverage is not a part of the Berkshire transaction and that distinguishes it from an LBO. But that is not why the procedural protections are invoked. The board needs those procedures because management may have a conflicting interest. And that is true whether management has a formal agreement with the private equity firm or not.

In that regard, as a practical matter, the possible conflicts for management are no different in a transaction with Berkshire than they would be in one with KKR. Berkshire and Buffett have just done a better job in perfecting a “brand.”

The Lubrizol board and its advisers seemed to have missed this issue entirely. In what may be a new world record, the proxy statement indicates that the lawyers advised the board at six separate board meetings of its fiduciary duties.

It is amazing that the potential conflict of management was either not identified or ignored. It may well be that the price is adequate and Berkshire may be composed of good people. Nevertheless, the independent directors should have done more to take control of the process.

(Note: the author owns shares of Berkshire Hathaway.)

Why Warren Buffett Just Spent $10 Billion

The Wall Street Journal

by Brett Arends

In other news on the markets this week, Warren Buffett quietly made an acquisition. A big one. Even by his standards.

The 80-year old investor put down $9.7 billion, or about a quarter of Berkshire Hathaway's entire cash pile, to buy Lubrizol Corporation, a specialty chemicals company based in Wickliffe, Ohio.

What does this mean for you? Warren Buffett's investment moves are usually worth a closer look, even if you're not one of his stockholders. After all, he's one of the most successful stock pickers ever. And it's never too late to practice your swing, even if your own stock portfolio is closer to $20,000 than, say, $20 billion.

A look through the company's financials reveals nine reasons Warren Buffett loves Lubrizol.

1. It has a lucrative niche.
Lubrizol's main business is making additives for fuel, which make engines run better and last longer. They are a small part of the cost of the fuel, but they are valuable to the end users and they are lucrative. Lubrizol's gross margins last year were a thumping 33%, up from 25% five years ago. The company's return on equity is 34%.

2. It has a wide moat.
Lubrizol has little trouble defending its business from competition. It has been around for 82 years – even longer than Mr. Buffett – and has built up a strong franchise. It is the market leader in the industry. And the fuel additives industry is technically advanced. Lubrizol owns a remarkable 1,600 patents and has 6,900 employees worldwide.

3. It's in a dull industry.
Nobody goes into the fuel additives business for the glamour. Venture capitalists are not throwing money after new fuel additives start-ups. Companies in the sector do not typically give away their products for free to gain market share, "eyeballs," "mind share" or the like. Indeed some of the existing players have been getting out – making life better for those who are left.

4. It has pricing power.
Mr. Buffett recently said "the single most important decision in evaluating a business is pricing power. If you've got the power to raise prices without losing business to a competitor, you've got a very good business." At a time of rising raw material costs, that's especially important. Lubrizol fits the bill. The company's own raw materials jumped 10% last year, but it was able to pass those costs on to its customers.

5. It's stable.
Sales fell 9% in 2009, but gross profits actually rose, from $1.1 billion to $1.5 billion. And the company says less than half of its revenues rely on boom-and-bust cyclical industries, such as construction and industrial production. Lubrizol had $2.7 billion in total liabilities at the end of last year – and $2.5 billion in cash and other current assets. Dividends have risen steadily, from $1.04 per share five years ago to $1.39 last year.

6. It benefits from overseas growth.
Two-thirds of last year's revenues came from outside the U.S.A. The company has 40% of its plant and equipment overseas. And that's rising. Last fall Lubrizol broke ground on a new factory in southern China, that will begin production in 2013. The company is a big beneficiary from economic growth in emerging markets. In countries like China, India and Brazil, hundreds of millions of people are moving into the middle class, buying cars, and driving them more. Every drive needs fuel, and every gallon of gas needs additives.

7. It has low unionization.
Just 4% of Lubrizol's U.S. employees are members of a union (although some overseas workers are also members of collective bargaining agreements). That's good for profits. Mr. Buffett may be a Democrat at nights and on weekends, but when he's at the office he's all business.
8. The stock was reasonably priced.
Even a great company can be a bad investment if you pay too much for it. In the case of Lubrizol, Mr. Buffett is paying $135 a share. That's less than 13 times last year's earnings, and 12 times forecasts for 2011. If you find a good company at a good price, who cares what "the market" is doing?

9. He likes the management.
Lubrizol chief executive James Hambrick has been with the company since 1973, when he started there as a co-operative education student. He's been CEO for seven years. "Lubrizol is exactly the sort of company with which we love to partner – the global leader in several market applications run by a talented CEO, James Hambrick," Mr. Buffett said when he announced the deal. "Our only instruction to James – just keep doing for us what you have done so successfully for your shareholders."

Buffett's Berkshire Hathaway Buoyed by Insurance 'Float'

Article published on http://www.wsj.com/

By SERENA NG And ERIK HOLM

Warren Buffett's Berkshire Hathaway Inc. has spent tens of billions of dollars on railroads, machine tools and utility companies in recent years. But Mr. Buffett's 2010 annual letter, to be released Saturday, is likely to emphasize just how much Berkshire's core insurance business is still driving its growth.
Berkshire, where Mr. Buffett serves as chairman and chief executive, is likely to report improved fourth-quarter earnings and an increase in book value, a performance yardstick Mr. Buffett uses to measure the company's growth. Results will be buoyed by rising stock markets that helped Berkshire's large stock portfolio and its derivatives contracts.

The company's manufacturing and retail operations, and its February 2010 acquisition of railroad Burlington Northern Santa Fe, likely boosted net income, as did insurance underwriting. Berkshire's net earnings through the first nine months of 2010 totaled $8.6 billion, already exceeding reported net income for the whole of 2009.

Of importance, Berkshire's pool of funds from insurance—something known as "float"—could have swelled to roughly $67 billion at the end of 2010 from $63 billion a year earlier. It is poised to rise further in 2011 despite challenging insurance-market conditions amid the slow economy, analysts say.

This float is money Berkshire holds to pay insurance claims in the future, but in the meantime can be put to work in stocks and long-term investments that earn returns for Berkshire's own benefit. Effectively borrowed funds at little or no cost, Berkshire's float enables the company to acquire businesses and assets beyond what its equity capital alone would permit, Mr. Buffett has previously said.

Last year's growth in float occurred even though Berkshire Hathaway Reinsurance Group, the giant reinsurer run by Ajit Jain, wrote its lowest level of property insurance to protect against hurricanes and other disasters in nearly a decade, as of Sept 30. As the broader market for commercial insurance extended a multiyear pricing slump, Berkshire limited the amount of catastrophe and individual risks it took because it didn't find premiums attractive enough.

Instead, the reinsurer acquired large books of long-term business from other insurers to bring in billions of dollars that Mr. Buffett and Berkshire's new investment manager Todd Combs can invest for many years—if not decades—before payouts have to be made. For example, Berkshire collected $2 billion in premiums last summer from a single asbestos and environmental-liabilities deal with insurer CNA Financial Corp., whose earnings had been hurt by liabilities from policies sold many years ago.

"Insurance companies that want to clean up parts of their balance sheet from historical woes often look to transact deals with Berkshire," said Bryon Ehrhart, chairman of reinsurance broker Aon Benfield's analytics division.

Berkshire Hathaway Reinsurance Group also grew significantly in the business of life reinsurance, by taking over coverage on the lives of thousands of Americans. A contract with Swiss Reinsurance Co. that closed in early 2010 gave Berkshire a block of individual term-life reinsurance business. This likely brought in over $2 billion in life and annuity premiums for Berkshire last year, estimates Jay Gelb, an analyst at Barclays Capital.

More premiums will come in this year from a recent acquisition of the life-reinsurance business of Toronto-based Sun Life Financial Inc., which was one of the largest players in this space.
The life-reinsurance deals will enable Berkshire to collect potentially tens of billions of dollars in premiums over the next few decades, money that Messrs. Buffett and Combs will put to work.
Berkshire will have to make payouts if individual policyholders die during the covered periods, but that won't happen immediately.

"These are all float creation deals," said Paul Howard, director of research at Solstice Investment Research. The expectation is that above-average investment returns generated by Berkshire over the long term will ultimately outrun its insurance liabilities, he adds.

Investment returns, however, have fallen across many asset classes since the financial crisis, when Berkshire was able to use money from its insurance operations to scoop up high-yielding securities in such companies as Goldman Sachs Group Inc. and General Electric Co. Those aid packages have earned Berkshire double-digit annual returns, but much of the money is expected to be repaid by the companies this year.

In his widely followed annual letter this Saturday, Mr. Buffett may repeat an earlier warning he has given Berkshire investors: The outsize returns he made on those crisis-era investments are unlikely to be repeated.

Berkshire's insurance businesses, which also include auto insurer Geico Corp. and reinsurer General Re Corp., likely generated underwriting profits last year, meaning they made money from the insurance they sold before factoring in investment income.

As long as the insurance is profitable, any money made by Messrs. Buffett and Combs on the float from these businesses belongs entirely to Berkshire. Mr. Buffett has previously described this as investing using other people's money without having to pay interest on the borrowed funds. The recent reinsurance deals, however, aren't without risk.

The deal with CNA Financial transferred $1.6 billion in asbestos and environment-pollution net liabilities to Berkshire along with $2 billion in premiums. Called "retroactive reinsurance" because it covers losses that have already occurred but whose final costs aren't known, Berkshire will be on the hook for up to $4 billion in insurance payouts. But if this limit is hit, it will likely be years in the future, by which time Berkshire could have multiplied the money it collected, say analysts.

Berkshire reached a similar retroactive reinsurance deal in 2006 with Equitas, a company formed by underwriters at Lloyd's of London. Berkshire agreed to pay up to $13.9 billion in asbestos and environmental claims and expenses at Equitas in the years ahead in exchange for $7.1 billion in cash and securities up front.

Mr. Buffett told shareholders in 2007 that there was no guarantee the Equitas deal would earn Berkshire money in the long term. But, he wrote, "Ajit and I think the odds are in our favor. And should we be wrong, Berkshire can handle it."

The retroactive reinsurance deals typically require Berkshire to record accounting losses over a period of time. Unlike most public companies, Berkshire "is willing to take business that depresses reported profits" if it expects to generate large economic profits over the long run, says Tom Russo, a partner at Gardner Russo & Gardner, an asset manager that holds Berkshire stock.

Mr. Gelb of Barclays Capital says it will "take a fair amount of time for the profits to emerge, but [the deals] will enable Berkshire to build up a tremendous amount of wealth over time."

Banks will demand bigger down payments

The subprime meltdown is living proof of the infinite number of systemic failures within mortgage origination practices applied by many, if not all of the lenders in the USA.

Today, WSJ’s Mitra Kalita presents us with a brief analysis on what could potentially be the uprising of a new mortgage origination era, one that could lead lenders and borrowers to act in a more responsible and conscious way.

Even though, some of you could argue that tougher loan origination policies may restrict credit accessibility for potential home buyers with little or no cash available, it’s also true that the recent subprime crisis was caused by both irresponsible lenders and borrowers that took advantage of the widely spread origination malpractice that allowed them to extensively profit either from lending money, debt securitization, speculating with properties' artificially increasing prices or from borrowing money that they could never pay back. Even though lenders, mortgage brokers, real estate agents, as well as sellers and buyers gained from such strategy, their actions consequently sparked a loss to us all.

I believe that the demand of bigger down payments will help strengthen our financial industry and will boost a sustainable growth in Real Estate markets across the USA. Certainly not everyone will profit or benefit from new responsible practices: housing markets will move slower, property inventories will suffer from smaller rotation and many of us will not be able to buy our dream home unless we actually have the means to do so (that’s not too bad, is it?).

Its common sense…which is in fact the less common of all our senses.
Not everyone will profit or benefit from responsible lending, but it is time to learn from mistakes of the past, to instead strengthen sustainable growth for all to benefit from.

Hope you like the reading:

http://online.wsj.com/article/SB10001424052748703312904576146532935600542.html?mod=WSJ_hp_MIDDLETopStories#dummy

Santiago H.

Startups = Jobs

Looking for Jobs in All the Wrong Places: Memo to the President
6:04 PM Wednesday January 26, 2011 by Henry R. Nothhaft with David Kline

Dear Mr. President,

Your State of the Union address last night offered hope to a nation made weary by an economy stubbornly resistant to job growth. But I must take issue with your claim that "None of us can predict with any certainty...where the new jobs will come from."

Brand new research conducted just last year by multiple teams of economists confirmed what many entrepreneurs such as myself had long suspected: startup businesses are responsible for all of America's new job growth.

Until now, the conventional wisdom has always been that small businesses create most jobs. But thanks to a new Census Bureau database called Business Dynamics Statistics (BDS) that correlates job creation with the annual number of new business starts, we now know that it's actually new businesses that do so (although most are obviously also small).

According to a recent study by the Kauffman Foundation, for example, all net job growth in the U.S. since 1977 has been due to start-ups. The data show that if you took start-ups out of the picture and looked only at large established firms, job growth in the U.S. over the last 34 years would actually be negative.

"When it comes to U.S. job growth," said Kauffman Foundation economist Tim Kane in his report, "start-up companies aren't everything. They're the only thing." In your address last night, Mr. President, you correctly noted that, "The first step in winning the future is encouraging American innovation." Here, too, start-ups are the driving engine of our nation's global innovation leadership.

It is startups who have generated virtually all of our nation's major technological breakthroughs in the last hundred years — from cars and planes to semiconductors, PCs, software, and the Internet — and in the process sparked the creation of whole new industries and millions of new jobs. And as economists have demonstrated, this kind of start-up-led innovation is the source of virtually all economic growth and increases in living standards in the U.S.

In other words, Mr. President, everything depends upon start-ups: Job creation. Our standard of living. Our prosperity as a nation. The American Dream itself. So if the target of national policy is job creation, then the bullseye of that policy must be centered on startups. Yet policy makers in both parties continue to aim at the wrong target.

Last month, Mr. President, you held a summit meeting with 20 of the nation's top CEOs to look for ways to spur job creation. But Fortune 100 CEOs are exactly the wrong people to talk to about jobs. Big Business is not a major job creator. Indeed, as one commentator put it, the guest list at this summit meeting represented "a who's who of outsourcing American jobs."

Then, this past Monday, you appointed General Electric CEO Jeffrey Immelt to chair your new council on jobs and competitiveness. Jeff Immelt is by all accounts an excellent CEO and a strong advocate of American competitiveness. But again, Mr. President, he is exactly the wrong person to talk to.

Instead, you should be meeting with the one group of people in America who actually creates jobs: entrepreneurs. Last night you spoke so compellingly about the "small business owner who dreams of turning a good idea into a thriving enterprise." But unfortunately, entrepreneurs are still largely invisible to policy makers. Everyone else has a voice in Washington — Big Business, retailers, insurers, doctors, bankers, and every other interest grouping you can think of. Only entrepreneurs lack a voice.

Mr. President, I have been a high-tech serial entrepreneur and CEO for more than 35 years. And in that time, I've created more than 6,000 jobs and returned $8 billion to investors. So please trust me when I say that one of the biggest roadblocks to job creation is the huge logjam at the patent office that prevents entrepreneurs from getting the patents they need to obtain venture funding. Without those patents and the funding they attract, few start-ups can afford to hire the people they need to develop their new products, services and medical treatments for the public.

Consider the case of Silicon Valley start-up Innate Immune, founded by world-renowned Stanford immunologist Sam Strober. It developed a new treatment for lupus, but has waited more than 7 years for a patent to be issued by an overburdened, underfunded USPTO groaning under a backlog of 1.2 million patent applications waiting for review.

"Hundreds of thousands of groundbreaking innovations are sitting on the shelf literally waiting to be examined," conceded your own patent office chief, David Kappos. And how many jobs are left un-created along with them? "Millions," said Kappos. "Millions of jobs."

My own analysis — conducted with retired Chief Judge Paul Michel of the nation's main court for patent appeals and reported in our New York Times op-ed last year — found that the U.S. could create as many as to 2.25 million new jobs just by clearing the patent backlog. A mere $1 billion spent on such an effort would create the most cost-effective jobs program in history.

To be sure, the patent backlog is not the only barrier to job creation. Start-ups today are also burdened by tax rates that are 50 percent higher than the average in Europe, belying your promise to "make America the best place on earth to do business."

And as for regulation, I applaud your promise to "reduce barriers to growth and investment." But if you could accomplish just one thing here, Mr. President, I hope it will be to end this nation's mindless one-size-fits-all approach to regulatory policy.
Who ever said that it was either smart or fair to impose on start-ups the same burdensome regulations meant to keep Big Business from sinking the whole economy again?

Perhaps the biggest job killer — and it's the greatest threat to the survival of America's once-vibrant middle class — is the systematic offshoring of our high-tech manufacturing capacity.
For 30 years now, we have all been fed the carefully-cultivated myth that so long as America did the creative work, the inventing, then we could let other nations like China do the so-called "grunt work," the manufacturing.

But in our arrogance and naiveté, we failed to realize that a nation that no longer makes things will eventually forget how to invent them.

Sincerely,

Henry R. Nothhaft

The Genius Dilemma - Newsweek

The Genius Dilemma - Newsweek

Just how essential is a company’s visionary founder? Apple and Google are about to find out.

Yale's Jeffrey Sonnenfeld writes about visionary founders and the companies that need to outlast them. Could Apple, Berkshire, Google and many others survive to their own leaders and continue to outperform their competitors? It goes well beyond Corporate Governance and Succession plans.

Hope you enjoy the reading!