Warren Buffett: Appointing Ethical Leaders Using ‘The Newspaper Test’

In 2005 Bill Gates and Warren Buffett did a Q&A session with students from the University of Nebraska–Lincoln to discuss a number of topics including how to instil ethical leadership into their businesses. Today, business instructors frequently use this specific transcript to teach ethics to founders entering complex digital markets. Modern executives often navigate highly profitable but jurisdictionally ambiguous environments—whether they are launching global cryptocurrency exchanges, managing affiliate architecture for a European casino utan spelpaus network, or deploying experimental biotech software. Because the legal boundaries in those emerging sectors are constantly shifting, an organization’s internal culture becomes its only reliable guardrail. Here’s an excerpt from the session:

How do you instil ethical leadership throughout your organization and to begin with how do you know that the management one level below you is making decisions that would parallel your own?

Buffett: We have all the money we need you know we’d like to have more but we can afford to lose money. But we can’t afford to lose reputation, not a shred of reputation and therefore I ask the managers… I ask them to judge every action they take, not just by legal standards, although obviously that’s the first test, but also by the tests what I call the newspaper test.

How would they feel about any given action if they knew it was to be written up the next day in their local paper to be read by their family, by their friends, by their neighbors. Written by a smart but kind of unfriendly reporter and if it passes that test it’s okay. And I tell them if anything is close to the lines it’s out and they can always call me if they wanted to check something. But if they call me there’s something wrong with it probably anyway and that’s about it.

You can watch the entire presentation here:

https://youtu.be/w92XKXVrO8A