How a head office of 28 people lets able managers run businesses it means to keep.
In one line
Berkshire keeps its businesses for good and leaves their managers alone, while a tiny head office decides where spare cash goes.
In 1996 Warren Buffett set down Berkshire's working rules in a booklet called the Owner's Manual. Its first principle reads: "Although our form is corporate, our attitude is partnership." Shareholders hear the bad news along with the good. Buffett wrote that more than 98% of his net worth sat in Berkshire, so his fortunes moved with theirs.
Each business is run by its own chief executive with wide freedom. At the end of 2025 just 28 people worked at head office, out of more than 380,000 in the group. Head office sets the businesses no targets. Its own work is choosing the managers and deciding where capital goes.
Cash travels upward. Managers send their surplus to Omaha, where it can go to any industry with a better return. Insurance adds float, the premiums Berkshire holds and invests before claims are paid. Debt is used sparingly, and most businesses outside insurance carry none.
Berkshire almost never sells a business it controls. Good ones are not for sale at any price, and weaker ones usually stay while they produce cash under sound managers. Profits are kept while each retained dollar should create more than a dollar of value. Greg Abel became chief executive on 1 January 2026 and restated the same values in his first letter.
Keep the centre small and useful. Berkshire's head office does two jobs and leaves the rest alone.
Treat cash as something to place. Berkshire's managers send spare cash to the centre for its best use.
Promise permanence, then keep the promise. Some owners pick Berkshire because it almost never sells. Candour with partners keeps that promise believable, most of all when the news is poor.
Buffett has written that Berkshire could not have achieved its results anywhere but America. Its engine was float, money that costs nothing when underwriting breaks even and has no repayment date. Here, almost every taka has a cost and a date to come back.
The hands-off model also assumes a seasoned manager is already in place. Munger wrote that Berkshire wants chief executives who need no help from head office. Many founder-led businesses here are younger, and the owner often carries the finance work alone.
Our own notes, from the company's letters, filings and public sources. Checked November 2026. Not investment advice.