Berkshire Hathaway to beef up danger disclosures following SEC request

By Jonathan Stempel

(Reuters) – Berkshire Hathaway (NYSE:) Inc agreed to higher clarify how its board of administrators manages dangers, together with these taken by longtime Chairman Warren Buffett, after the U.S. Securities and Change Fee requested that it do a greater job.

In correspondence made public on Tuesday, the SEC’s division of company finance requested Berkshire to “improve” its danger administration disclosures in its annual proxy filings, and Berkshire agreed to make the requested adjustments.

Regardless of Buffett’s legendary standing as an investor and supervisor, some analysts have lengthy urged the billionaire’s Omaha, Nebraska-based firm, whose market worth is about $670 billion, to reveal extra about itself.

The SEC sought extra disclosures on how Berkshire’s board addresses short- and long-term dangers, the extent to which the board speaks with administration and outdoors specialists to establish future dangers, and why the board oversees danger administration as a substitute of delegating it to a committee.

It additionally requested Berkshire to deal with whether or not its lead impartial director can override Buffett on danger issues or ask the board to contemplate them. Former Yahoo President Susan Decker was named to that place in September 2021.

The SEC made its requests in a Sept. 2, 2022 letter, and Berkshire Chief Monetary Officer Marc Hamburg agreed to them six days later.

Berkshire didn’t instantly reply to a request for remark to Buffett’s assistant. Its 2023 proxy submitting is anticipated this week.

Buffett’s firm owns dozens of companies akin to Geico automotive insurance coverage and the BNSF railroad.

Many are mentioned in only some sentences or paragraphs in its annual experiences.

Berkshire additionally doesn’t maintain analyst calls, and communicates to the general public primarily by means of monetary disclosures, its annual assembly and Buffett’s annual shareholder letter.

Buffett, 92, has targeted on capital administration and investments since ceding day-to-day oversight of Berkshire-owned companies in 2018 to Vice Chairmen Greg Abel, who’s Buffett’s anticipated successor as chief government, and Ajit Jain.

He has additionally mentioned Berkshire’s disclosures are ample, and lots of companies are too small to advantage prolonged dialogue.