Dave Sather's Money Matters: Put integrity first
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This past weekend some 40,000 shareholders listened to Warren Buffett field questions at Berkshire Hathaway's annual meeting.
Although Buffett is incredibly skilled at answering a variety of questions, the most popular had to do with the apparent insider trading violations committed by David Sokol.
Sokol, who had long been rumored to be Buffett's successor, resigned after it was determined he purchased shares in a company that Sokol later encouraged Buffett to acquire without fully disclosing his ownership.
Buffett's company, Berkshire Hathaway, has more than 60 operating entities and 260,000 employees. And yet, he leaves the managers to run the divisions as they see fit - with one caveat. Buffett states plainly and bluntly to his managers: "If you lose money, I will understand. If you cause us to lose one shred of reputation, I will be ruthless."
Buffett also has routinely said, "Don't do anything you wouldn't want printed on the front page of the paper."
Although Buffett has taken some heat for not being more ruthless in handling Sokol, consider that Sokol is no longer with Berkshire and is being investigated for insider trading by the Securities and Exchange Commission. His career with Berkshire is over and his reputation is permanently tainted.
Given all that our nation has been through in the past several years with our financial crisis and banking meltdown, it makes one wonder whether Buffett is the only one adhering to such old fashioned ideologies as honesty and integrity.
Buffett is a self-made man worth more than $40 billion. It seems that honesty and integrity have worked rather well for him and his companies. But is he the only one? Many days it seems that the news media drones on and on about never-ending scandals in the business world. It certainly makes one wonder.
While Buffett may be the most publicized, he is not the only one adhering to such simple concepts. In 2000, Dr. Thomas Stanley penned a follow-up to his best seller, "The Millionaire Next Door." This second book, titled "The Millionaire Mind," went well beyond identifying who had money in our country and researched what they felt was important and what made them tick.
Stanley's research revealed that success was not incumbent upon having an Ivy League education or being lucky. It was not having a superior intellect or graduating at the top of their class.
Rather, much like Buffett, the wealthiest people in our country ranked "being honest with all people" as the No. 1 factor behind their success.
When I look through South Texas I see this value on a daily basis. We live in a small community full of successful people. We see our clients at the grocery store, the movies, church and everywhere else. If you are honest, people are appreciative and loyal. If you are deceptive, word spreads like wild fire with an incredibly long memory.
Although many on Wall Street may have lost their moral compass, you cannot paint all businesspeople with the same broad brush stroke.
Success in business and integrity are not mutually exclusive. In fact, they may actually be the winning combination for tremendous long-term accomplishment.
Dave Sather is a Victoria Certified Financial Planner and owner of Sather Financial Group. His column, Money Matters, publishes every other week.