Berkshire's Disintermediation: Buffett's New Managerial Model 

19 Pages Posted: 7 May 2015 Last revised: 13 Jun 2015

See all articles by Lawrence A. Cunningham

Lawrence A. Cunningham

George Washington University; Quality Shareholders Group

Date Written: 2015


Berkshire Hathaway, among history’s largest and most successful corporations, shuns middlemen; its chairman, the legendary investor Warren Buffett, excoriates financial intermediaries. The acquisitive conglomerate rarely borrows money, retains brokers, or hires consultants. Its governance is lean, using an advisory board and bucking all forms of corporate bureaucracy. Berkshire’s shareholders also minimize the roles of intermediaries like stockbrokers and stock exchanges by trading little and holding for lengthy periods.

By exploring Berkshire’s antipathy to intermediation, this article supports the view that public policy ought to make considerable room for companies to define their own internal business practices and that more companies ought to consider emulating aspects of Berkshire’s disintermediation. While Buffett’s legacy to date has been to lead two generations of value investors, Berkshire’s radically ingenious disintermediation has the potential to shape the next two generations of value managers, as argued in this paper and at greater length in the author’s recent book, Berkshire Beyond Buffett: The Enduring Value of Values.

Keywords: business administration, management, disintermediation, Berkshire Hathaway, Warren Buffett, conglomerate, decentralization, advisory board, governance, leverage, corporate culture, trust, internal control

JEL Classification: D02, D21, D22, D23, D24, D25, D73, K22, K29, L00, L14, L20, L21, L22, L25, M10, M12, M14

Suggested Citation

Cunningham, Lawrence A., Berkshire's Disintermediation: Buffett's New Managerial Model  (2015). GWU Law School Public Law Research Paper No. 2015-16, GWU Legal Studies Research Paper No. 2015-16, Rock Center for Corporate Governance at Stanford University Working Paper Series No. 205, Available at SSRN: or

Lawrence A. Cunningham (Contact Author)

George Washington University ( email )

Quality Shareholders Group ( email )

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