CalPERS to Vote for NLPC Shareholder Proposal for Independent Berkshire Hathaway Chairman

CalPERS, the nation’s biggest public pension fund, says it will vote for National Legal and Policy Center’s shareholder proposal at Berkshire Hathaway for the roles of board chairman and chief executive officer to be held by separate leaders.

Warren Buffett (pictured above) currently holds both positions. NLPC Chairman Peter Flaherty reacted by saying, “We welcome CalPERS support for our resolution. We hope other shareholders will follow.”

CalPERS stands for California Public Employees’ Retirement System. It indicated in a regulatory filing on April 19 that it would vote for the proposal, as first reported by Reuters.

According to Flaherty, “Separating the two roles is good corporate governance, plain and simple. Public companies should not be run like private firms. Of course, investors can sell their securities if they are dissatisfied with management, but that is not the only option. We can instead assert our rights as shareholders, as we are doing here.”

The Berkshire Hathaway annual meeting will take place on April 30 in Omaha, Nebraska. Here is the text of the proposal and supporting statement:


Shareholders request the Board of Directors adopt as policy, and amend the bylaws as necessary, to require hereafter that the Chair of the Board of Directors be an independent member of the Board, consistent with applicable law and existing contracts. If the Board determines that a Chair who was independent when selected is no longer independent, the Board shall select a new Chair who satisfies the requirements of the policy within a reasonable amount of time.




Berkshire Hathaway Inc.’s Chief Executive Officer is also Board Chairman. We believe these roles – each with separate, different responsibilities that are critical to the health of a successful corporation – are greatly diminished when held by a singular company official, thus weakening its governance structure.


Expert perspectives substantiate our position:


According to the Council of Institutional Investors ( ), “A CEO who also serves as chair can exert excessive influence on the board and its agenda, weakening the board’s oversight of management. Separating the chair and CEO positions reduces this conflict, and an independent chair provides the clearest separation of power between the CEO and the rest of the board.”


A 2014 report from Deloitte ( ) concluded, “The chairman should lead the board and there should be a clear division of responsibilities between the chairman and the chief executive officer (CEO).”


Proxy adviser Glass Lewis advised ( ) in 2016, “an independent chairman…is better able to oversee the executives of the Company and set a pro-shareholder agenda without the management conflicts that exist when a CEO or other executive also serves as chairman.”

The company opposes the proposal. Its statement of opposition from the proxy:

Warren Buffett, Berkshire’s CEO, currently has a 32% voting interest in Berkshire. The Board believes that as long as Mr. Buffett is Berkshire’s CEO, he should continue as Board Chair and as Berkshire’s CEO. However, as has been stated on numerous occasions by Mr. Buffett in the past, once Mr. Buffett is no longer Berkshire’s CEO, a non-management director should be named Board Chair. The Board agrees with Mr. Buffett and accordingly recommends that the shareholders vote against this proposal.

For media inquiries, contact Dan Rene 202-329-8357 or [email protected].



Tags: Berkshire Hathaway, CalPERS, Warren Buffett

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