"I ask the managers to judge every action they take -- not just by legal standards, though obviously, that's the first test -- but also by what I call the 'newspaper test,'" explained Buffett.
Basically, if an article "written by a smart but pretty unfriendly reporter" appeared in a local newspaper about a decision or action you made, and your family, friends, and neighbors read it, how would you feel about it?
"It's pretty simple," says Buffett. "If [your decision or action] passes that test, it's okay. If anything is too close to the lines, it's out."
Buffett's newspaper test, if you pass it, can take you far because in business, if your reputation fails, game over.
"We have all the money we need," the billionaire said. "We'd like to have more, but we can afford to lose money. But we can't afford to lose reputation."
Buffett's reputation line was not a fleeting one-time remark to pass off to a student. It's a life lesson he's lived by as the chairman and CEO of Berkshire Hathaway. "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that you'll do things differently."
"20 Years Ago, Warren Buffett Shared a Brutal Truth That Most People Have Yet to Learn," Inc. May 5, 2021.
