The One Rule Warren Buffett Gives All His Managers
Warren Buffett is the world’s most renowned investor, and at a time, was the world’s richest man. His one guiding principle for the survival of his company -Berkshire Hathaway Inc.- has remained the same for over 3 decades.
As someone who has a lot of managers working for his company, you would think he (Warren Buffett) will have several “do”s and “don’t”s to help steer his company. No, he doesn’t. Instead, the survival of Berkshire Hathaway hinges on one word – Reputation.
When Mr Buffett sends out a memo to his manager, this word is always echoed in all of them.
He writes:
“It has been 2 and half years since my last memo, here is a couple of things you need to keep in mind.
- We can afford to lose money, even a lot of money, we cannot afford to lose reputation, even a shred of reputation. Let’s be sure that everything we do in business can be reported on the front page of a national newspaper, in an article written by an unfriendly but intelligent reporter.”
For Buffett, the most important thing about his company is the amount of money they make. rather, it is the reputation of the Berskshire Hathaway Inc. That he would even welcome a scenario where the company takes a loss, but never a shred of reputation loss.
Reputation is the backbone of Warren Buffett’s Business
In many areas, including acquisitions, his company’s results have benefited from its reputation and he always will warn his managers that they do nothing that will tarnish the company’s reputation.
There are several businesses within Wall Street that have been ruined by a single bad actor. Many professionals who failed to report a violation of ethical practices have had their career destroyed by that single act of omission.
Mr Buffett can allow for losses – as he pointed out – but never a shred of reputation. He emphasizes the need to be very transparent in all dealings and stick to the laws and regulations guiding investment firms.
This is the reason why his company has consistently been ranked yearly as one of the world’s most admired companies. For this year, 2025 – Berkshire is the 5th most admired company in the world (according to Fortune).
Brand or Business reputation takes a lot of work and time to build, but it takes minutes to destroy it.
“It took us 37 years to build it (Berkshire Hathaway’s reputation) but it can be lost in 37 mins” – Warren Buffett.
If you lose money, you can get it back. But once you lose your reputation, you can’t get it back. No one entertains doing business with someone lacking in integrity.
See: Warren Buffett’s Principles of Long-Term Wealth Creation
