I'm not a huge fan of Warren Buffett's politics or some of his corporate governance moves (e.g., his failure to do proper succession planning and the way he threw David Sokol under the bus), but his annual letters to the shareholders of Berkshire-Hathaway are legitimate milestones in American business thinking. Lawrence Cunningham has collected those letters and essays in a series of anthologies, the most recent of which is now available (it's the one on the far left).
Cunnigham lays out the importance of the essays in a post at Harvard's corporate governance blog:
The essays address some of the most important governance problems. The first is the importance of forthrightness and candor in communications by managers to shareholders. Buffett tells it like it is, or at least as he sees it, and laments that he is in the minority. Berkshire’s annual report is not glossy; Buffett prepares its contents using words and numbers people of average intelligence can understand; and all investors get the same information at the same time. Buffett and Berkshire avoid making predictions, a bad managerial habit that too often leads other managers to make up their financial reports.
Cunningham goes on to summarize the lessons he thinks we can learn from Buffett's letters.
Pamela Holmes reviewed the latest edition (the one on the far left above) for Conglomerate:
The first edition of The Essays of Warren Buffett: Lessons for Corporate America was the focus of a symposium held twenty years ago and was the standard textbook for a specialized course taught by the author, Professor Lawrence A. Cunningham of George Washington University Law School. It has since been adopted by many law and business schools for study in investment, finance and accounting. Investment firms have used this book in their staff and investor training programs. However, the layman should not be put off by these credentials as the book is an approachable guide to understanding investment. Buffett quotes Twain, Churchill and even Woody Allen. If it's a matter of faith in Warren's wisdom, you may be reassured by the sprinkling of Biblical references used to illustrate his points.
A sampling of Buffett's sage advice to shareholders includes, "Beware of companies displaying weak accounting." If you question what you see, "it is likely they are following a similar path behind the scenes. There is seldom just one cockroach in the kitchen." Berkshire Hathaway's board of directors do not receive company stock as part of their compensation, they "purchased their holdings in the market just as you did...I love such honest-to-God ownership. After all, who ever washes a rental car?" Another gem, "...lemmings as a class may be derided but never does an individual lemming get criticized."
Organized by topic rather than chronologically, the words of Mr. Buffett are the words of every man - there is extremely little corporate lingo and no baffling verbiage. His plain-speak is valuable guidance to learning the history of investing in the U.S., the good and the bad, and to understanding how you can make an intelligent investment decision if effort is put into researching the integrity and focus of company and management behind the investment. ...
Kevin LaCroix writes that despite some quibbles:
The book itself is quite an accomplishment; it is that rare business book that is both worthwhile and enjoyable to read.
He also writes that:
The latest edition is updated to include excerpts from Buffett’s most recent letters. The book not only facilitates quick location of Buffett’s statements on specific topics, but it also affords an opportunity to see how Buffett has developed his themes over time, which unquestionably provides great insight into Buffett’s investment views.
