Does Charlie Munger's board structure at the Daily Journal reflect a mindset of legal efficiency?

Does the Board Structure of Charlie Munger's Daily Journal Reflect a Legal Efficiency Mindset?

Hey there! I'm a big fan of Munger and have studied some corporate governance. Let's dive into this question—I'll explain it plainly without beating around the bush. You probably know Charlie Munger as Vice Chairman of Berkshire Hathaway, but today we're talking about Daily Journal Corporation (DJCO), a small company he chairs that focuses on legal publishing and court software. The question is: does its board structure reflect a "legal efficiency mindset"? My take is yes—it’s classic Munger: simple, pragmatic, and efficient. Here’s why, step by step.

First, Understanding Munger’s "Legal Efficiency Mindset"

Munger started as a lawyer. He often says the law shouldn’t be a pile of complex rules but should pursue efficiency. What’s efficiency? Getting things done with minimal resources, avoiding wasted time and effort. In investing and management, he always emphasizes "less is more" and hates bureaucracy. For example, he often quotes: "A good legal system should be simple, enabling smart people to make decisions quickly." This isn’t just talk—at Daily Journal, he applied this thinking to the board structure.

What Does Daily Journal’s Board Look Like?

DJCO isn’t huge—its market cap is just a few hundred million—but its board is ultra-lean:

Tiny membership: Usually just 5–7 people, including Munger himself, his longtime partner Jerry Salzman (CEO), and a few independent directors. No flashy committees.
No extra layers: Unlike big corporations with subcommittees (audit, compensation, etc.), DJCO’s board handles things directly. Munger himself said their meetings are short and decisions quick because the group is small and everyone knows the business.
Focus on trust and independence: Directors are mostly people Munger trusts, with legal or business backgrounds, but no red tape. Munger even joked at a shareholder meeting that their board feels "like a small family gathering."

Sounds simple, right? But it’s efficient: small teams decide fast, skip layers of approval, and fit DJCO’s niche-focused model.

How Does This Reflect Legal Efficiency Thinking?

Munger’s legal background makes him despise inefficiency. U.S. corporate law requires boards to meet basics like independent director ratios and disclosure duties. But Munger avoids extremes—he didn’t turn the board into a "rubber stamp" (existing in name only) nor let it bloat into bureaucracy. He uses legal frameworks to enable efficiency:

Pursuing simplicity while avoiding legal risk: The law demands board oversight of management. Munger achieves this with a small board—fewer people mean lower communication costs and reduced error risk.
Munger’s hands-on practice: He’s led DJCO for 40+ years, transforming it from traditional newspapers to software through efficient decisions. Imagine if the board had too many voices—would the pivot have worked? Munger often says good governance isn’t about more rules but picking the right people and simplifying processes. That’s his "legal efficiency": using legal tools to serve practical efficiency, not the other way around.
Contrast with other companies: Giants like Google or Apple often have 10+ directors and multiple committees, sometimes dragging efficiency down. DJCO flips this script, proving small, focused boards work better—especially in legal services (DJCO’s core business).

Of course, it’s not flawless. Critics argue a tiny board lacks diversity or that Munger’s influence is too strong. But from an efficiency lens, it embodies his view: law isn’t a shackle but a tool to move faster.

My Takeaway

In short, yes—Daily Journal’s board structure absolutely reflects Munger’s legal efficiency mindset. It’s like his life philosophy: learn more, do less dumb stuff, solve problems simply. If you’re into Munger, I recommend his book Poor Charlie’s Almanack—it’s full of efficiency insights. Feel free to ask more questions anytime!