(Reuters) — Berkshire Hathaway Inc. agreed to better explain how its board handles risks, including those taken by longtime chairman Warren Buffett, after the U.S. Securities and Exchange Commission asked it to do a better job.
In correspondence made public on Tuesday, the SEC’s Division of Corporate Finance asked Berkshire to “improve” its risk management disclosures in its annual proxy statements, and Berkshire agreed to make the requested changes.
Despite Mr. Buffett’s legendary status as an investor and manager has some analysts long urging the billionaire’s Omaha, Nebraska-based company, which has a market value of about $670 billion, to reveal more about itself.
The SEC sought more information about how Berkshire̵
7;s board manages short- and long-term risks, the extent to which the board talks with management and outside experts to identify future risks, and why the board oversees risk management rather than delegating it to a committee.It also asked Berkshire to address whether its lead independent director can override Mr. Buffett on risk issues or ask the board to consider them. Former Yahoo president Susan Decker was named to that position in September 2021.
The SEC made its requests in a letter on September 2, 2022, and Berkshire CFO Marc Hamburg agreed to them six days later.
Berkshire did not immediately respond to a request for comment for Mr. Buffett’s assistant. Its 2023 proxy file is expected this week.
Mr. Buffett’s company owns dozens of companies such as Geico auto insurance and the BNSF railroad.
Many are discussed in only a few sentences or paragraphs in its annual reports.
Berkshire also does not hold analyst calls and communicates to the public primarily through financial disclosures, its annual meeting and Mr. Buffett’s Annual Shareholder Letter.
Buffett, 92, has focused on asset management and investments since handing day-to-day oversight of Berkshire-owned companies in 2018 to Vice Chairman Greg Abel, who is Buffett’s expected successor as CEO, and Ajit Jain.
He has also said that Berkshire’s disclosures are sufficient and that many companies are too small to merit a lengthy discussion.
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