Howard Buffett said following his billionaire father, Warren, as chairman of Berkshire Hathaway would require upholding practices that have been prized for decades as the company grew to US$240 billion in market value.
Buffet junior, 58, said protecting Berkshire's culture "means that I need to make sure that people feel that they've been treated fairly, that whatever my dad committed to them remains committed.
During more than four decades leading Berkshire, Warren Buffett, 82, has distinguished his company from other firms through his ability to allocate capital and boost investors' equity more than 5,000-fold per share. He has achieved those results by practicing a management philosophy that eschews the importance of quarterly financial results and gives autonomy to the heads of the company's more than 70 operating subsidiaries.
The billionaire, who is also the company's largest shareholder, has said the next generation of leaders should divide his duties among a chief executive officer, investment managers and his son, a farmer and philanthropist who has been on the board since 1993.
The younger Buffett is a director of Coca-Cola, the world's largest soft-drink maker, and once was the head of investor relations for Archer-Daniels-Midland. He said observing his father helped him get ready to lead a board that also includes Microsoft co-founder Bill Gates.
"In a way, I've been preparing for it all my life," Howard Buffett said. "In another way, I've been on the Berkshire board now 20 years. That's a preparation."
The transition to a second generation of the family atop the board made sense only if Howard Buffett did not have operational duties, said Jeff Matthews, a Berkshire shareholder and author of Warren Buffett's Successor: Who It Is and Why It Matters. The father has encouraged public policies that reward people based on their merits, rather than connections, saying in 2007 that he favoured "equality of opportunity."
It is "hard to argue that out of all the potential successors to Warren Buffett, that Howard Buffett is absolutely the best guy, unless you take into consideration what the role is," Matthews said. "The role as chairman is not CEO. It's to preserve the Berkshire culture. And when you look at it that way, he's probably the right guy."
The elder Buffett has relied on the heads of subsidiaries including the insurer Geico and the railway company Burlington Northern Santa Fe to run their businesses, leaving him time to weigh how to invest the firm's cash. He quipped in a message to shareholders in 1999, laying out Berkshire's operating principles, that he and vice-chairman Charles Munger "delegate almost to the point of abdication".
"You don't want a CEO who's going to change that and drive managers away," Howard Buffett said.