The Warren Buffett school: they have free rein, ready capital and the best boss a CEO could want. They run Berkshire Hathaway companies, and you've only begun to envy them - Careers - chief executive officer

Chief Executive, The, Dec, 2002 by Russ Banham

Every year, Buffett reminds his CEOs how important personal integrity is to him. "He sends out this letter, and the opening paragraph is always the same, Wolff says. "I've seen it enough times by now that I've got it memorized: 'We can afford to lose money. We can afford to lose a lot of money. But we cannot afford to lose one shred of our reputation. Make sure everything you do can be reported on the front page of your local newspaper written by an unfriendly, but intelligent reporter.' Those comments were written long before the recent corporate scandals."

Berkshire Hathaway CEOs operate with minimum oversight and a generous budget. "The only part Buffett plays is managing asset allocation, and we're small enough that he doesn't do much there. We spend capital pretty freely," Wolff says. "Sometimes I stop and remind myself I don't own the company anymore.

Likewise, when Buffett acquired Helzberg Diamond Shops, "Mr. Buffett said that I should run the company as I saw fit," Comment recalls. "Two days later he called to apologize. 'Jeff,' he said, 'I do want you to change one thing. Call all your friendly bankers and tell them to go away. I'm your bank now.' And he has been ever since." Helzberg Diamonds has grown from 150 stores in 1995 when Buffett acquired it to 246 today.

Not that Buffett rubber stamps every request for money. Scott Hymas, CEO of Salt Lake City-based R.C. Willey Home Furnishings, acquired by Buffett in 1995, says the financier was taken aback when Bill Child, Hymas' predecessor, wanted to open another furniture store in Boise, Idaho, but planned to close it on Sunday, a day when most retailers make 20 to 25 percent of their weekly gross. "Bill believed workers needed a day of rest, and since the store was open from 10 a.m. to 10 p.m. the rest of the week, he figured there was ample time for people to shop," Hymas explains.

Buffett was skeptical. So Child footed the $9 million bill for the store, which now brings in $60 million a year. "Bill waited until the store was successful and then sold it back to Berkshire Hathaway at cost," Hymas says. A couple of years later, Child wanted to build another store, this time in Las Vegas. Buffett asked if the store would be closed on Sunday and Child told him yes. Not wanting to be wrong again, Buffett put up the cash. Today, the Las Vegas store is the highest grossing in the R.C. Willey chain.

Buffett family values

More than anything else, what sets Berkshire bosses apart from other CEOs is a wholesome sensibility. Buffett has pledged almost all of his money to the Buffett Foundation, a charity focused on world population control. His CEOs also are deeply involved in philanthropy. Eliot Tatelman and his wife, for instance, run a retreat for sick children in Hubbardston, Mass., called Camp Miracles and Magic. Comment has just written a book, Santa's with a foreword by Buffett, about his involvement in a seven-year-old program of the same name. Every year he dresses up as Santa Claus and visits pediatric hospitals. "I see about 3,000 kids each year," Comment says, "giving each a teddy bear that says, 'I am loved.'"