Why Warren Buffett didn’t choose his son as CEO of Berkshire Hathaway

In a surprise move on 3 May 2025, Warren Buffett, the 94-year-old investment titan, announced he would be stepping down as Chief Executive Officer of Berkshire Hathaway by the end of the year. While the decision to retire had long been anticipated, it was the name he revealed as his successor that sparked the most intrigue. Greg Abel, 62, Vice Chairman of Berkshire Hathaway’s non-insurance operations, will take over the reins—marking a defining moment in the conglomerate’s storied history.

But the real question circulating among shareholders and market watchers alike was this: Why not Howard Buffett?

Despite being Buffett’s son and a key member of Berkshire Hathaway’s board for over three decades, Howard will not be taking on the role of CEO. Instead, he will step in as Non-Executive Chairman, tasked with preserving the company’s unique corporate culture—a deliberate separation of responsibility that Warren Buffett himself has engineered over decades of succession planning.

The announcement came during Berkshire Hathaway’s annual shareholder meeting in Omaha, attended by more than 40,000 investors from around the world. Even Greg Abel, widely considered the heir apparent, was caught off guard. According to Buffett, only the board and his two children—Howard and Susie—knew about the announcement beforehand.

“I think the time has arrived where Greg should become the Chief Executive Officer of the company at year end,” Buffett said, drawing applause from the audience. Abel, who has served as Vice Chair since 2018, has long been involved in overseeing Berkshire’s vast array of non-insurance businesses, which include utilities, railroads, and consumer brands.

While Abel’s elevation didn’t shock insiders, the clear decision to pass over Buffett’s own children highlighted a deeply considered philosophy: leadership at Berkshire must be earned, not inherited.

Howard Buffett: Not the CEO, but the cultural anchor

Howard Graham Buffett, 70, has been a Berkshire board member for over 30 years and has long been seen as his father’s closest confidant when it comes to values and principles. But even he acknowledged that executive leadership was not in his purview.

“I feel I’m prepared for this role because he (Warren Buffett) prepared me. That’s a lot of years of influence and a lot of years of teaching,” Howard told The Wall Street Journal earlier this year. His new title, Non-Executive Chairman, reflects that mentorship and is designed to ensure the “Berkshire way” lives on—even in the absence of its founder.

Warren Buffett was candid in his assessment. Speaking to the Journal, he said, “He [Howard] is getting it because he’s my son. I’m very, very, very lucky in the fact that I trust all three of my children.”

The elder Buffett made no pretence about the rationale. While Greg Abel has spent years running billion-dollar businesses within Berkshire, Howard's strengths lie in stewardship, not strategy. His role is less about financial management and more about ensuring ethical clarity, cultural stability, and shareholder trust.

Buffett has long maintained a clear stance against dynastic succession. A vocal critic of inherited wealth, he has repeatedly said that his children would not inherit the bulk of his fortune. In one of the largest philanthropic gestures in history, Buffett gave $140 billion worth of Berkshire stock to his three children—Howard, Susie (71), and Peter (66)—but assigned these funds to philanthropic causes, not personal wealth.

This distinction matters. While Buffett trusts his children and values their contribution to the company, he has insisted that they should not be handed roles they haven’t earned through operational excellence.

As he famously said: “A very rich person should leave his kids enough to do anything, but not enough to do nothing.”

Greg Abel, by contrast, is a businessman through and through. Born in Canada, Abel came up through the ranks by running MidAmerican Energy, now known as Berkshire Hathaway Energy. His disciplined approach to capital, decentralised leadership style, and deep familiarity with Berkshire’s wide-reaching empire have earned him Buffett’s quiet confidence for over a decade.

Buffett's vision for Berkshire without him

Buffett’s succession plan, decades in the making, splits key responsibilities among trusted hands. Greg Abel will manage day-to-day operations and future investments, while Howard Buffett will oversee the board and ensure that Berkshire’s decentralised ethos is protected.

“Keep things simple. Do what you need to do. Treat people fairly, respect your managers, respect your shareholders. Tell them the bad news upfront, be honest. It’s not rocket science,” Howard recently said, describing the principles at the heart of Berkshire’s culture.

His siblings echo this trust. Susie Buffett, who joined the board in 2021, said that when Howard is interested in something, he “gets interested 110 per cent.” Peter Buffett described his brother as someone who “feels a responsibility to preserve our father’s legacy,” noting that Howard “carries the weight of meaning around Berkshire and what my dad has built.”

Founded in 1965, Berkshire Hathaway is now worth more than $1 trillion and encompasses more than 200 companies. Its portfolio includes household names like Geico, BNSF Railway, Dairy Queen, See’s Candies, and Fruit of the Loom. Buffett, along with his late business partner Charlie Munger, transformed the company from a failing textile firm into one of the largest and most respected conglomerates in the world.

Munger, who passed away in November 2023, was instrumental in shaping the investment philosophy that made Berkshire legendary. With his absence and Buffett’s impending retirement, the leadership baton is now firmly in the hands of a new generation.

Shareholders and investors appear reassured by the continuity. Abel’s selection signals that the core philosophy of value investing, decentralised management, and long-term thinking will continue under stable stewardship. The presence of Howard Buffett as Non-Executive Chairman further bolsters confidence that the company’s values won’t drift in pursuit of short-term gains.

Yet, perhaps the most powerful message from this transition is a personal one. Buffett’s refusal to hand his company to his children out of convenience or sentiment stands as a remarkable act of principle—especially in a world where nepotism often triumphs over merit.

As Berkshire Hathaway prepares for a post-Buffett era, the message is clear: success must be earned, and legacy is not a birthright but a responsibility. And in Warren Buffett’s world, responsibility always comes first.