“The job of the board of directors is to have the right CEO. I mean, if you’ve got the right CEO, 90 percent of it takes care of itself. If you were the director of Cap Cities and you had Tom Murphy as the CEO, case closed. It was all you needed. And if you have that CEO, I think you have an obligation on the board to make sure that there’s not overreaching by the CEO, because the CEO can have different interests. And I think the third thing that the board should do is they really should bring some independent judgment in on major acquisitions. Because there is a natural tendency for people with, usually, big egos, big motors, who get to be CEOs that like to do big things and to become bigger spending other people’s money…. So I think in those three respects, a good director will first make an affirmative decision [that] you’ve got a very good CEO — not the best in the whole world, not everybody can do that — but a very good CEO. That that CEO is not overreaching. And when significant deals come along, that they get a chance to weigh in, and that you really get a balanced discussion about the real economics of what you’re doing.” —Warren Buffett.
Warren Buffett: Right CEO