Ladders and chutes.

Following the conviction earlier this year of four General Re executives on criminal fraud charges, federal prosecutors are trying to pressure Berkshire Hathaway into removing the current CEO, Joseph P. Brandon – despite the fact that neither the SEC nor any prosecutor has charged him with wrongdoing. After the trial, prosecutors said they would “work up the ladder” in an effort to clean up Dodge. But not only has Brandon cooperated with the investigation and prosecution of Gen Re executives, he has sought no immunity agreement for himself.

This is just flat-out the wrong thing for prosecutors to be doing. It should not be their business to hire and fire. However, in today’s post-Enron atmosphere, you see it all the time. Government prosecutors, regulators, and attorneys who represent the company or the company’s audit committee insist on a purge in order to trumpet a cleanup and remediation. In the case of Gen Re, not only did the guy they want to fire unselfishly cooperate with the effort to make things right, but by all accounts he was doing an excellent job as CEO. Just because you work your way up a ladder doesn’t mean you have to put a good guy on the outbound chute. CR