What does Warren Buffett consider the most crucial factor when selecting a successor?

Buffett's Most Critical Consideration in Selecting a Successor

According to Buffett's statements in his shareholder letters, the most crucial factor in selecting a successor for Berkshire Hathaway is the successor's character. Buffett emphasizes that while competence is important, character is paramount, as it determines whether the successor can uphold the company's unique culture, operate with integrity, and be accountable to shareholders. Specifically:

• Character Over Competence: Buffett has repeatedly stated that when choosing leaders, he values intelligence, energy, and integrity, with integrity being the most essential. A successor lacking character, even if highly competent, could pose significant risks.
• Preserving Company Culture: The successor must embrace and perpetuate Berkshire's culture of decentralized management, long-term orientation, and shareholder focus, avoiding short-term speculation.
• Relevant Letter Citations: In his 2011 and 2014 shareholder letters, Buffett explicitly stated that the Board would prioritize internal candidates, ensuring they possess qualities of rationality, calmness, and decisiveness, while also being able to identify and avoid major risks.

This perspective reflects Buffett's leadership philosophy: an effective succession plan is not about replicating oneself, but about safeguarding the core values that ensure the company's enduring success.