Warren Buffett under scrutiny by new corporate governance issues

Buffett's Coke role questioned


Buffett advises buying and holding stocks, not turning them quickly
An advisor to shareholders on corporate governance issues has questioned Warren Buffett's independence as a director of soft drinks giant Coca-Cola.
Institutional Shareholder Services (ISS) has urged investors not to re-appoint Mr Buffett, citing his business links to the company.

Coca-Cola dismissed the complaint and called Mr Buffett "a man of unimpeachable integrity".

It added that Mr Buffett's position was in line with stock exchange rules.


Supply chain

The problem, according to ISS is that companies controlled by Mr Buffett's Berkshire Hathaway investment firm buys millions of dollars of products from Coca-Cola every year.

A subsidiary called McLane, for example, last year purchased $104m of syrup and other goods from Coca-Cola.

The drinks maker, meanwhile, buys services such as advertising from companies controlled by Mr Buffett.

ISS argues that because of these relationships, Mr Buffett - one of the world's most successful investors - is far from independent and has compromised his position on the company's audit committee.

Coca-Cola, however, are keen to retain Mr Buffett's services.

The company says that his position as the company's biggest shareholders gives him a unique position and it would be a waste not to benefit from his experience...cont'd

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