Munger: Trust-Based Governance

Munger: Trust-Based Governance

Charlie Munger, well-known partner of Warren Buffet, contends that it is unreasonable that governance systems based on incentives and controls, including an independent BoD to monitor management, to expect such a system to work equally well in all settings.

”The right culture, the highest and best culture, is a seamless web of deserved trust.”

 

”Good character is very efficient. If you can trust people, your system can be way simpler. There’s enormous efficiency in good character and dis-efficiency in bad character.”

 

”By the standards of the rest of the world, we overtrust. So far it has worked very well for us. Some would see it as weakness.”

Stanford Closer Look: Corporate Governance According to Charles T. Munger

NY Times: Berkshire’s Radical Strategy: Trust