BERKSHIRE HATHAWAY INC. | Independent board chairman at BERKSHIRE HATHAWAY INC.

Status
10.95% votes in favour
AGM date
Previous AGM date
Proposal number
8
Resolution details
Company ticker
BRK/A US
Lead filer
National Legal and Policy Center
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • CEO / chair duality
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Financials
Company HQ country
United States
Resolved clause
Resolved: Shareholders request the Board of Directors adopt as policy, and amend the governing documents as necessary, to require hereafter that two separate people hold the office of the Chairman and the office of the CEO as follows:
- Selection of the Chairman of the Board: The Board requires the separation of the offices of the Chairman of the Board and the Chief Executive Officer.
-Whenever possible, the Chairman of the Board shall be an Independent Director.
- The Board may select a Temporary Chairman of the Board who is not an Independent Director to serve while the Board seeks an Independent Chairman of the Board.
- The Chairman shall not be a former CEO of the company.
- Selection of the Chairman of the Board shall be consistent with applicable law and existing contracts.
Supporting statement
Supporting Statement: The Chief Executive Office of Berkshire Hathaway Inc. is also Board Chairman. We believe these roles – each with separate, different responsibilities that are critical to the health of a successful corporation – are greatly diminished when held by a singular company official, thus weakening its governance structure.

Expert perspectives substantiate our position:
- According to the Council of Institutional Investors (https://bit.ly/3pKrtJK), “A CEO who also serves as chair can exert excessive influence on the board and its agenda, weakening the board’s oversight of management. Separating the chair and CEO positions reduces this conflict, and an independent chair provides the clearest separation of power between the CEO and the rest of the board.”
-A 2014 report from Deloitte (https://bit.ly/3vQGqe1) concluded, “The chairman should lead the board and there should be a clear division of responsibilities between the chairman and the chief executive officer (CEO).”
- A pair of business law professors wrote for Harvard Business Review (https://bit.ly/3xvcIOA) in March 2020 that “letting the CEO chair the board can compromise board discussion quality, weakening the corporation’s risk management ability…Splitting the CEO and board chair jobs between two people can help strengthen the quality of questions the corporation asks itself. When those questions remain, weak, the organization is less likely to develop strategies that mitigate risk.”
- Proxy adviser Glass Lewis advised (https://bit.ly/3xwuJwa) in 2021, “the presence of an independent chair fosters the creation of a thoughtful and dynamic board not dominated by the views of senior management. Further, we believe that the separation of these two key roles eliminates the conflict of interest that inevitably occurs when a CEO is responsible for self-oversight.”

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Anima Sgr For It is in shareholders' best interest to separate the positions of CEO and chairman in order to avoid potential conflicts of interest that may arise when one person holds both positions, e.g. in situations where a chairman is in charge of evaluating her/his own performance as CEO or reviewing the performance of management. Moreover, a unified chairman and CEO position poses a direct threat to the smooth functioning of the entire board process since it is the ultimate responsibility of the chairman to set the agenda, facilitate discussion, and make sure that directors are given complete access to information in order to make informed decisions.
Rothschild & co Asset Management For

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