Thu | Aug 5, 2021

Warren Buffett resigns from Gates Foundation

Published:Thursday | June 24, 2021 | 12:08 AM
Warren Buffett, chairman and CEO of Berkshire Hathaway Inc.
Warren Buffett, chairman and CEO of Berkshire Hathaway Inc.

Warren Buffett resigned on Wednesday as trustee of the Bill and Melinda Gates Foundation, which says it will announce plans in July to answer questions raised about its leadership structure as it deals with the divorce of its two founders.

The announcement from Buffett comes weeks after Bill and Melinda Gates revealed that they were divorcing after 27 years of marriage but would continue to jointly run one of the largest charitable foundations in the world. Buffett was one of three members of the foundation’s board — the other two are Bill and Melinda Gates.

“For years I have been a trustee – an inactive trustee at that – of only one recipient of my funds, the Bill and Melinda Gates Foundation (BMG). I am now resigning from that post, just as I have done at all corporate boards other than Berkshire’s,” Buffett said in a prepared statement on Wednesday. “The CEO of BMG is Mark Suzman, an outstanding recent selection who has my full support. My goals are 100 per cent in sync with those of the foundation, and my physical participation is in no way needed to achieve these goals.”

Buffett, the chairman and chief executive of Berkshire Hathaway, also said that he is halfway to reaching his goal of giving away the entirety of his shares in the conglomerate and that he’s donating another US$4.1 billion in shares to five foundations, though the lion’s share went to the Bill and Melinda Gates Foundation. In Buffett’s donation announced on Wednesday, it received more than US$3.2 billion, bringing his total giving to the foundation to nearly US$33 billion, Suzman said in a statement.

“I know Warren’s departure raises questions about the foundation’s governance,” Suzman said, adding he has been “actively discussing with him, Bill, and Melinda approaches to strengthen our governance to provide long-term stability and sustainability for the foundation’s governance and decision-making in light of the recent announcement of Bill and Melinda’s divorce. I plan to share additional information in July.”

The Bill and Melinda Gates Foundation has a trust endowment of about US$50 billion and around 1,600 employees, having funded work in 135 countries. There have been calls in philanthropy circles to diversify the foundation’s board, and critics have long pointed out that decision-making is concentrated in very few hands at the foundation, which they say has outsized influence in public health and other fields.

“Big foundations need strong oversight. The Gates Foundation has a lot of power, and to have so few people who are playing a governance role is just problematic,” said David Callahan, the founder of the Inside Philanthropy website and author of The Givers: Wealth, Power, and Philanthropy in a New Gilded Age.

Now that Buffett is stepping down, Melissa Berman, the president & CEO of Rockefeller Philanthropy Advisors, notes it gives the foundation an opportunity to think about its governance for the long run.

“Organisations are looking to bring a more diverse range of expertise and experiences into their governance,” Berman said. “A larger board would help position the Gates Foundation for deeper impact in global health, economic opportunity and education.”

Bill and Melinda Gates said in separate statements on Wednesday that they were grateful for Buffett’s leadership, generosity and friendship. “His wisdom has been a guiding light through our foundation’s second decade, and the things we’ve learned from him will continue to help us chart a way forward,” said Melinda Gates.

Buffett, 90, did not address growing questions raised about the structure of the foundation’s leadership after reports of Bill Gates’ behaviour in the workplace.

AP