Warren Buffett's Newspaper Test During the 1991 Salomon Brothers Testimony

"Lose money for the firm, and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless..."

Warren Buffet’s 50-second self-compliance test from his 1991 testimony to Congress in the wake of the Salomon Brothers scandal. Played every year at the Berkshire Hathaway shareholder meeting, it's a timeless reminder for investors and businesses. Below is the clip's transcript:

“…In the end, the spirit about compliance is as important or more so than words about compliance. I want the right words and I want the full range of internal controls.

But I also have asked every Salomon employee to be his or her own compliance officer.

After they first obey all rules, I then 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.

If they follow this test, they need not fear my other message to them. Lose money for the firm, and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless.

I welcome your questions.”

Source: Investor Archive/C-SPAN.