Warren Buffett: Every Company Needs an Owner’s Manual

During the 2004 Berkshire Hathaway Annual Meeting, Warren Buffett discussed his approval of Google’s adoption of a communication style inspired by Berkshire Hathaway’s Owner’s Manual.

He emphasizes the importance of companies being transparent with their investors about their principles and operational approaches. Buffett believes this straightforwardness builds trust, akin to what one might expect in a partnership.

He commends Google’s founders for their clarity and honesty, even if he doesn’t fully agree with all their ideas, and encourages more companies to follow suit. Buffett highlights that Berkshire has long adhered to these principles, aiming for mutual understanding with stakeholders, and appreciates Google’s alignment with this philosophy.

Here’s an excerpt from the meeting:

Buffett: I’m very pleased that the Google — the fellows at Google decided — and they say they, it was, I think they used the word “inspired” by the Berkshire Owner’s Manual.

And, you know, it obviously pleases us enormously that other people think that it’s a good idea to talk to their owners — or in their case, their prospective owners — in a very straight-forward manner.

If you buy into Google, having read their owner’s manual, you know, you will — I think you’ll know the kind of people you’re associating with. You’ll know what they will do and won’t do.

It’s the kind of thing that one person would say to another if you were setting up a partnership. And were — you said, you know, “I’d like you to join me in a partnership. I need your money.

And here’s the way we’re going to do business.” And I think more companies — obviously, I think more companies ought to do it. It’s been simple for us at Berkshire.

We’ve had these principles in mind for a long time. And we really want people to understand those principles before they join with us. And the Google fellows, in a very straightforward manner, you know, I liked their prose.

You know, it doesn’t mean I agree with every idea they have, but, you know, I do know what ideas they do have. And I hope more companies sign on for that sort of thing. Charlie?

Munger: Well, you know, most of the world does not, in any way, imitate Berkshire Hathaway. This is a quirky few. It may look — there may be 19,500 of you that came — but it’s still a quirky few by the standards of the country.

And what’s interesting about Google is those two guys who created that are two of the smartest young men in the whole country. And it’s much more fun to be copied by people that smart, than — (Laughter)

You can watch the entire meeting here: