Integrity Matters
June 4, 2003

Nothing like annual meetings to restore trust

Question: (E-049)

What about the thousands of solid corporate leaders who have not been embarrassed by scandals or even been accused of being overly compensated. Can their annual meetings restore trust? Please say yes! We need to find ways to strengthen the foundations of free markets. Can annual stockholders' meetings help?


Yes, Annual Meetings can restore trust. They can be powerful in areas related to motivation and confidence (trust) specifically when this type of tone is established:

  1. Stockholders have appropriate access to the leader or leaders.
  2. The agenda is not so orchestrated that important content gets lost.
  3. Leaders own the problems and communicate sensible solutions to issues.
  4. Those in charge are willing to listen.
  5. Commitments are recorded and follow-up actions are systematically reviewed and evaluated in subsequent meetings and minutes.

Unless or until such a tone is set, confidence in corporate leadership will not grow. Those who attend Berkshire Hathaway’s annual shareholders' meeting, informed and inspired by Chairman Warren E. Buffett, generally walk away feeling that:

  1. They have had genuine access to the leadership of the organization.
  2. Important issues are addressed in writing and discussed in person.
  3. Problems are identified, owned and addressed by those who are responsible, the boss or bosses, in this instance, Mr. Buffett.
  4. Concerns of individuals are heard, clearly and non-defensively.
  5. Responsive leadership fulfills promises, acknowledging any shortcomings along the way.

In a few words, annual meetings can restore trust when the leaders who structure and conduct them work on a model that operates along lines similar to those of Berkshire Hathaway’s. As a mentor of mine was quick to say: “there is no substitute for the truth.” Yes, integrity matters. Tell the truth and demand the truth, all the time.

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