Only about a dozen chief executives in the insurance industry can answer the question suggested by our headline. For the rest of us who can only imagine it, a recent analysis by two researchers provides details.

In a mid-December posting on Harvard Business Review’s website, Professor David Larcker, the James Irvin Miller Professor of Accounting and senior faculty at the Rock Center for Corporate Governance at Stanford University, and Brian Tayan, a Rock Center researcher, summarize the results of their survey of chief executive officers of Berkshire Hathaway’s operating subsidiaries.

(AP Photo/Nati Harnik)
(AP Photo/Nati Harnik)

The HBR article, titled “What It’s Like to Be Owned by Berkshire Hathaway,” is available at The full report, “Trust and Consequences: A Survey of Berkshire Hathaway Operating Managers,” published in late October, is available here and here.
In short, Buffett’s “management system is very different from those of other publicly traded companies,” the two researchers report, going on to describe the substantial degree of autonomy granted to the subsidiary leaders.

That autonomy—a well-known ingredient of the Berkshire Hathaway model—is only one of the central themes that emerged from their survey and the summary report in the HBR article. Larcker and Tayan’s full report published on the Stanford website also describes an overriding culture of integrity and an orientation to long-term performance horizons as notable takeaways from the survey responses.

Describing the management style as one of “extreme decentralization,” the researchers report that more than 80 operating subsidiaries have only two requirements from headquarters: They have to provide regular financial statements and must return excess cash (not needed to sustain or grow business).

Other survey findings disclosed in the full report paint an even more vivid picture of exactly how hands-off Buffett is. For example, none of the CEOs surveyed reported getting any phone calls from Buffett—and they don’t expect him to call, even when the subsidiaries are struggling. The subsidiary CEOs do talk to him, however—some monthly and some quarterly. But they all initiate the conversations, the report says.

The CEOs pretty much agreed that Berkshire Hathaway headquarters would not get involved in their businesses even if they faced any one of a long list of adverse events—ranging from legal or regulatory action to modest sales blips—but that large restatements of prior financials or events impacting the parent company’s reputation would prompt headquarters action. (There was less agreement on subsidiary reputational events and modest restatements.)

So what happens if one of Buffett’s deputies—National Indemnity’s Ajit Jain perhaps—calls your company to propose an acquisition?

According to the report, CEOs of smaller subsidiaries (less than $1 billion in revenue) said that there was only a one- or two-month span between the initial discussion and agreement to acquisition terms; larger subsidiaries were in discussions for six to nine months, Larcker and Tayan report.

What happens next?

Not much in the way of governance changes. According to the report, the most frequently cited changes are the elimination or change in composition of the board of directors and changes to the terms of CEO compensation contracts. “Some insurance subsidiary CEOs report that changes were made to the company’s internal audit and risk management practices,” the report says.

The report does not reveal how many insurance subsidiary CEOs responded to the survey of executives from 80 Berkshire Hathaway operating subsidiaries. (Editor’s Note: Berkshire Hathaway’s most recent annual report for 2014 lists over 90 subsidiaries—12 related to insurance—on a page disclosing the employee count at each subsidiary.)

In addition to questions about headquarters contact and communications with the man himself, the report also summarizes survey responses related to performance time horizons, communications between subsidiary leaders, executive compensation metrics, thoughts on whether the subsidiaries might perform better under another owner, succession planning requirements for themselves and the subsidiary CEO perspectives on life after Buffett when his eventual successor takes the helm.