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BERKSHIRE HATHAWAY INC.
CODE OF BUSINESS CONDUCT AND ETHICS
A.
Scope.
This Code of Business Conduct and Ethics applies to all Berkshire Hathaway directors,
officers and employees, as well as to directors, officers and employees of each subsidiary of
Berkshire Hathaway.
Such directors, officers and employees are referred to herein collectively
as the “Covered Parties.”
Berkshire Hathaway and its subsidiaries are referred to herein
collectively as the “Company.”
B.
Purpose.
The Company is proud of the values with which it conducts business.
It has and will
continue to uphold the highest levels of business ethics and personal integrity in all types of
transactions and interactions.
To this end, this Code of Business Conduct and Ethics serves to
(1) emphasize the Company’s commitment to ethics and compliance with the law; (2) set forth
basic standards of ethical and legal behavior; (3) provide reporting mechanisms for known or
suspected ethical or legal violations; and (4) help prevent and detect wrongdoing.
Given the variety and complexity of ethical questions that may arise in the Company’s
course of business, this Code of Business Conduct and Ethics serves only as a rough guide.
Confronted with ethically ambiguous situations, the Covered Parties should remember the
Company’s commitment to the highest ethical standards and seek advice from supervisors,
managers or other appropriate personnel to ensure that all actions they take on behalf of the
Company honor this commitment.
When in doubt, remember Warren Buffett’s rule of thumb:
“…I want employees to ask themselves whether they are willing to
have any contemplated act appear the next day on the front page of
their local paper – to be read by their spouses, children and friends
– with the reporting done by an informed and critical reporter.”
C.
Ethical Standards.
1.
Conflicts of Interest
.
A conflict of interest exists when a person’s private interest interferes in any way with the
interests of the Company.
A conflict can arise when a Covered Party takes actions or has
interests that may make it difficult to perform his or her work for the Company objectively and
effectively.
Conflicts of interest may also arise when a Covered Party, or members of his or her
family, receive improper personal benefits as a result of his or her position at the Company.
Loans to, or guarantees of obligations of, Covered Parties and their family members may create
conflicts of interest.
It is almost always a conflict of interest for a Covered Party to work
simultaneously for a competitor, customer or supplier.
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Conflicts of interest may not always be clear-cut, so if you have a question, you should
consult with your supervisor or manager or, if circumstances warrant, the chief financial officer
or chief legal officer of the Company.
Any Covered Party who becomes aware of a conflict or
potential conflict should bring it to the attention of a supervisor, manager or other appropriate
personnel or consult the procedures described in Section E of this Code.
All directors and executive officers of the Company [, and the chief executive officers
and chief financial officers of Berkshire Hathaway’s subsidiaries,] shall disclose any material
transaction or relationship that reasonably could be expected to give rise to such a conflict to the
Chairman of the Company’s Audit Committee.
No action may be taken with respect to such
transaction or party unless and until such action has been approved by the Audit Committee.
2.
Corporate Opportunities
.
Covered Parties are prohibited from taking for themselves opportunities that are
discovered through the use of corporate property, information or position without the consent of
the Board of Directors of the Company.
No Covered Party may use corporate property,
information or position for improper personal gain, and no employee may compete with the
Company directly or indirectly.
Covered Parties owe a duty to the Company to advance its
legitimate interests whenever possible.
3.
Fair Dealing
.
Covered Parties shall behave honestly and ethically at all times and with all people.
They
shall act in good faith, with due care, and shall engage only in fair and open competition, by
treating ethically competitors, suppliers, customers, and colleagues.
Stealing proprietary
information, possessing trade secret information that was obtained without the owner’s consent,
or inducing such disclosures by past or present employees of other companies is prohibited.
No
Covered Party should take unfair advantage of anyone through manipulation, concealment, abuse
of privileged information, misrepresentation of material facts, or any other unfair practice.
The purpose of business entertainment and gifts in a commercial setting is to create good
will and sound working relationships, not to gain unfair advantage with customers.
No gift or
entertainment should ever be offered or accepted by a Covered Party or any family member of a
Covered Party unless it (1) is consistent with customary business practices, (2) is not excessive in
value, (3) cannot be construed as a bribe or payoff and (4) does not violate any laws or
regulations.
The offer or acceptance of cash gifts by any Covered Party is prohibited.
Covered
Parties should discuss with their supervisors, managers or other appropriate personnel any gifts
or proposed gifts which they think may be inappropriate.
4.
Insider Trading
.
Covered Parties who have access to confidential information are not permitted to use or
share that information for securities trading purposes (“insider trading”) or for any other purpose
except the conduct of the Company’s business.
All non-public information about the Company
should be considered confidential information.
It is always illegal to trade in Berkshire
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Hathaway securities while in possession of material, non-public information, and it is also illegal
to communicate or “tip” such information to others.
While all Covered Parties are prohibited
from insider trading, Berkshire has adopted specific “Insider Trading Policies and Procedures”
applicable to the Company’s directors, executive officers and key employees (“Directors and
Covered Employees”).
This document is posted on Berkshire’s website and is sent periodically
to Directors and Covered Employees in connection with certification of compliance.
5.
Confidentiality
.
Covered Parties must maintain the confidentiality of confidential information entrusted to
them, except when disclosure is authorized by an appropriate legal officer of the Company or
required by laws or regulations.
Confidential information includes all non-public information
that might be of use to competitors or harmful to the Company or its customers if disclosed.
It
also includes information that suppliers and customers have entrusted to the Company.
The
obligation to preserve confidential information continues even after employment ends.
6.
Protection and Proper Use of Company Assets
.
All Covered Parties should endeavor to protect the Company’s assets and ensure their
efficient use.
Theft, carelessness, and waste have a direct impact on the Company’s profitability.
Any suspected incident of fraud or theft should be immediately reported for investigation.
The
Company’s equipment should not be used for non-Company business, though incidental personal
use is permitted.
The obligation of Covered Parties to protect the Company’s assets includes its proprietary
information.
Proprietary information includes intellectual property such as trade secrets, patents,
trademarks, and copyrights, as well as business, marketing and service plans, engineering and
manufacturing ideas, designs, databases, records, salary information and any unpublished
financial data and reports.
Unauthorized use or distribution of this information would violate
Company policy.
It could also be illegal and result in civil or criminal penalties.
7.
Compliance with Laws, Rules and Regulations
.
Obeying the law, both in letter and in spirit, is the foundation on which the Company’s
ethical standards are built.
In conducting the business of the Company, the Covered Parties shall
comply with applicable governmental laws, rules and regulations at all levels of government in
the United States and in any non-U.S. jurisdiction in which the Company does business.
Although not all Covered Parties are expected to know the details of these laws, it is important to
know enough about the applicable local, state and national laws to determine when to seek
advice from supervisors, managers or other appropriate personnel.
The document “Prohibited Business Practices Policy” sets forth the Company’s policy on
compliance with laws, specifically addressing such topics as prohibited offers or payments, gifts
and entertainment, transactions with certain countries and persons, accounting controls, and
accurate record-keeping.
This Policy is furnished to senior managers and available to all
employees.
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8.
Timely and Truthful Public Disclosure
.
In reports and documents filed with or submitted to the Securities and Exchange
Commission and other regulators by the Company, and in other public communications made by
the Company, the Covered Parties involved in the preparation of such reports and documents
(including those who are involved in the preparation of financial or other reports and the
information included in such reports and documents) shall make disclosures that are full, fair,
accurate, timely and understandable.
Where applicable, these Covered Parties shall provide
thorough and accurate financial and accounting data for inclusion in such disclosures.
They shall
not knowingly conceal or falsify information, misrepresent material facts or omit material facts
necessary to avoid misleading the Company’s independent public auditors or investors.
9.
Significant Accounting Deficiencies
.
The CEO and each senior financial officer shall promptly bring to the attention of the
Audit Committee any information he or she may have concerning (a) significant deficiencies in
the design or operation of internal control over financial reporting which could adversely affect
the Company’s ability to record, process, summarize and report financial data or (b) any fraud,
whether or not material, that involves management or other employees who have a significant
role in the Company’s financial reporting, disclosures or internal control over financial reporting.
D.
Waivers.
Any waiver of this Code for executive officers or directors may be made only by the
Company’s Board of Directors or its Audit Committee and will be promptly disclosed as
required by law or stock exchange regulation.
E.
Violations of Ethical Standards.
1.
Reporting Known or Suspected Violations.
The Company’s directors, CEO, senior financial officers and chief legal officer shall
promptly report any known or suspected violations of this Code to the Chairman of the
Company’s Audit Committee.
All other Covered Parties should talk to supervisors, managers or
other appropriate personnel about known or suspected illegal or unethical behavior.
These
Covered Parties may also report questionable behavior in the same manner as they may report
complaints regarding accounting, internal accounting controls or auditing matters by contacting
(anonymously, if desired) a third party organization called
NAVEX Global
(toll-free number
800-261-8651 or web site at http://brk-hotline.com).
Separate anonymous reporting procedures
are available for Company employees working outside the United States.
No retaliatory action
of any kind will be permitted against anyone making such a report in good faith, and the
Company’s Audit Committee will strictly enforce this prohibition.
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2.
Accountability for Violations.
If the Company’s Audit Committee or its designee determines that this Code has been
violated, either directly, by failure to report a violation, or by withholding information related to
a violation, the offending Covered Party may be disciplined for non-compliance with penalties
up to and including removal from office or dismissal.
Such penalties may include written notices
to the individual involved that a violation has been determined, censure by the Audit Committee,
demotion or re-assignment of the individual involved and suspension with or without pay or
benefits. Violations of this Code may also constitute violations of law and may result in criminal
penalties and civil liabilities for the offending Covered Party and the Company.
All Covered
Parties are expected to cooperate in internal investigations of misconduct.
F.
Compliance Procedures.
We must all work together to ensure prompt and consistent action against violations of
this Code.
In some situations, however, it is difficult to know if a violation has occurred.
Because we cannot anticipate every situation that will arise, it is important that we have a way to
approach a new question or problem.
These are the steps to keep in mind:
Make sure you have all the facts.
In order to reach the right solutions, we must be
as informed as possible.
Ask yourself:
What specifically am I being asked to do?
Does it seem unethical
or improper?
Use your judgment and common sense.
If something seems unethical or
improper, it probably is.
Clarify your responsibility and role.
In most situations, there is shared
responsibility.
Are your colleagues informed?
It may help to get others involved and
discuss the problem.
Discuss the problem with your supervisor.
This is the basic guidance for all
situations.
In many cases, your supervisor will be more knowledgeable about the
questions, and he or she will appreciate being consulted as part of the decision-making
process.
Seek help from Company resources.
In rare cases where it would be
inappropriate or uncomfortable to discuss an issue with your supervisor, or where you
believe your supervisor has given you an inappropriate answer, discuss it locally with
your office manager or your human resources manager.
You may report ethical violations in confidence without fear of retaliation.
If
your situation requires that your identity be kept secret, your anonymity will be protected
to the maximum extent consistent with the Company’s legal obligations.
The Company
in all circumstances prohibits retaliation of any kind against those who report ethical
violations in good faith.
Ask first, act later.
If you are unsure of what to do in any situation, seek guidance
before you act.