Risk & Compliance

Buffett to Leave Coke Board

Both Calpers and ISS have criticized him for allowing the company's auditor to perform non-audit work.
Stephen TaubFebruary 14, 2006

Warren Buffett is leaving Coca-Cola Co.’s board of directors.

The Oracle of Omaha informed Coca-Cola that he does not intend to stand for re-election at the upcoming annual meeting, according to a company statement.

Reportedly, Buffett cited the increased demands on his time resulting from Berkshire Hathaway’s acquisitions of new companies. However, he assured investors that Berkshire intends to retain its substantial holdings of Coca-Cola stock.

“Leaving Coca-Cola is difficult, as it has been a privilege and a pleasure to serve on the board of this wonderful company,” said Buffett, in the statement. “Under Neville Isdell’s leadership, the company is implementing the right strategy to create value for its shareowners and realize the potential of the world’s greatest brand.”

Isdell, the chairman and chief executive officer, added: “Everyone at Coca-Cola is immensely proud of Warren Buffett and Berkshire Hathaway’s long and continuing stake in our company. And we have benefited immeasurably from Warren’s wise and sage counsel over the past 17 years.”

In the past two years, however, Buffett’s tenure on the Coca-Cola board drew some criticism. In 2004, Calpers announced that it would not vote its 12.7 million Coca-Cola shares for Buffett and other audit-committee members because they had allowed the company’s auditor to perform non-audit work. In addition, for the past two years Institutional Shareholder Services had recommended shareholders withhold their votes for Buffett because of the audit-committee issue as well as what ISS claimed were potential conflicts of interest.

Coca-Cola also announced that J. Pedro Reinhard would leave the board. Buffett’s and Reinhard’s terms expire on April 19; the company stated that it has no immediate plans to fill the vacated seats.