Warren Buffett reveals why his eldest son will inherit the empire – as part of a succession plan

Warren Buffett transformed Berkshire Hathaway from a failed textile company into a sprawling conglomerate worth nearly $1 trillion. Now 94, he is close to handing over the reins, with one of the most high-profile jobs, that of non-executive chairman, set to go to his middle son, a philanthropist and farmer with an interesting CV.

Who is Howie Buffett?

Howard Graham Buffett is the middle son of Warren Buffett. Howie, as he liked to be called, was born in December 1954. He excelled in school but struggled in college and never earned a college degree.

His CV is long and full of different job titles. Over the years, Howie Buffet has been an employee of numerous companies, including Berkshire subsidiaries, a bailiff, a member and later chairman of the Nebraska Ethanol Board, a best-selling author, a philanthropist, and a farmer.

He has also served on the boards of companies, including Archer-Daniels-Midland (ADM), The Coca-Cola Company (KO), Coca-Cola Enterprises, Lindsay Corporation (LNN), ConAgra Foods (CAG), Sloan Implement, and Berkshire Hathaway (BRK.B).

Why does Warren Buffett want Howie to succeed him?

Warren Buffett’s decision to hand over the reins to his son, which he made years ago, has been interpreted mainly as a way to preserve Berkshire Hathaway’s culture. He spoke of his fear of the company falling into the wrong hands, shareholders’ interests being ignored, and shareholders being stripped of their positions. This meant that he had to leave Berkshire to someone he trusted and knew the company well. Howie was the answer.

Howie Buffett had a front-row seat to how his father ran Berkshire from the beginning. He listened to his father’s business calls as a child, sat on the company’s board of directors for more than 30 years, and trained for decades to sit at the head of the table.

The possible future of Berkshire Hathaway

Some investors are concerned about the plan. Criticisms of Howie include his lack of experience in making large investments, acquiring companies, and managing a conglomerate with such diverse operations. To them, this move reeks of nepotism.

Warren Buffett played down concerns about Howie’s lack of experience, claiming that his son “won’t have to think about running the business” but only whether the board “might need to change the CEO.” For Warren, the most important quality of a non-executive chairman is knowing the company and its culture well. Hoey, who says he has no plan to pursue change at Berkshire, appears to tick that box.

Some analysts say that without Warren Buffett and longtime Vice Chairman Charlie Munger, who died in 2023, Berkshire could lose influence and negotiating power at a time when it struggles, like any big buyer of other companies, to continue finding deals that add enough value. There is a common view that Berkshire will have to adapt its business model to satisfy investors, specifically by spinning off the company and prioritizing the return of capital to shareholders.

In his son, Howie, Warren Buffett has someone he can trust who will do everything in his power to protect Berkshire Hathaway’s culture and ensure the business is run the way he wants. Howie knows the company inside and out, has experience serving on corporate boards, and has been preparing for this role for years.

But this may not be enough to prove critics wrong. Howie has very big shoes to fill.