For more than half a century, billionaire Warren Buffett has proved he knows a thing or two about how to run a company.
Buffett recently released his bi-annual memo to his top managers (he calls them his “All Stars”). What he says in the memo—and how he says it—should make ethics and compliance professionals take notice.
Here are six things Buffett’s memo gets right—and that you can replicate as you communicate the importance of a strong culture of ethics and respect with your stakeholders in your communications throughout the year.
1) Written in Plain English: The memo is personable and straightforward. Authenticity and readability are critical in ethics and compliance communications, helping create trust and transparency.
2) Reflects Deep Commitment to Fostering a “Speak-Up” Culture: The memo underscores Buffett’s commitment to a speak-up culture. In fact, he invites his managers to notify him personally at the first suspicion of a potential misdeed. “If you see anything whose propriety or legality causes you to hesitate, be sure to give me a call,” he says.
3) Underscores Strong “Tone From the Top”: Buffett challenges his senior staff to embrace the idea that their actions should be born out of not only what’s legal and ethical, but also what’s right and good—actions they would “be happy to have written about on the front page of a national newspaper.”
4) Puts Ethical Practices Ahead of Profit: In saying, “we can afford to lose money—even a lot of money. But we can’t afford to lose reputation—even a shred of reputation,” Buffett clearly sends a clear message to his senior and middle managers about where the organization’s priorities lie.
5) Underscores the Business Value of a Strong Culture: The memo also emphasizes the business value of a strong culture. His own portfolio would underline that fact; supported by his emphasis on corporate culture, it’s estimated to be worth $73.1B. In the note, Buffett says that “culture, more than rule books, determines how an organization behaves.”
6) Short and to the Point: Finally, the note is concise and targeted. It delivers its strong message to a specific audience quickly and in only a couple of pages. It’s immediately clear that Buffett has high expectations of his employees—and specifically places a high level of trust on his senior leaders.
To support a “speak-up” culture that helps mitigate behavior risk—as well as strong “tone in the middle”—we highly encourage compliance professionals to communicate regularly with their managers, who are the culture carriers in an organization.
To help, we provide free content compliance leaders can use to communicate with middle managers, addressing their top ethics and compliance challenges.
Check out our collection of Ready Made Memos, and use the content that best meets your organization’s needs. And keep Buffett’s classic communication – both style and substance—in mind as you communicate E&C priorities with your managers, and continue to build a strong culture of ethics and respect in your organization.