Instead of asking "Is this legal?", a better ethical filter is Charlie Munger's question: "Is this beneath me?" This personal standard prevents engaging in technically legal but unethical behaviors, like selling a financial product you wouldn't recommend to your own mother. It creates a higher bar for conduct.
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Warren Buffett's reputation for honesty isn't just a moral stance; it's a core business strategy. It attracts private business owners seeking a trustworthy partner, leading to a steady flow of exclusive, high-quality acquisition opportunities that competitors never see.
To avoid ethical slippery slopes, project the outcome of a small compromise over time. Exaggerating a claim by 2% for better results seems harmless, but that success creates temptation to push it to 4%, then 8%. This compounding effect pushes you far from your original ethical baseline before you notice.
Nietzsche's thought experiment of eternally reliving one's life forces moral clarity, mirroring Warren Buffett's "inner scorecard." Both concepts champion making decisions based on internal principles and integrity, rather than external validation, social pressure, or legality.
Founders often mistake their preferences for principles. A true principle is a non-negotiable rule you adhere to regardless of the trade-offs (e.g., 'always do things the right way'). A preference is a desired path you're willing to abandon when circumstances change (e.g., 'prefer not to build a sales team yet'). Clarifying this distinction leads to more consistent and high-integrity decisions.
To accurately assess a leader's actions, especially an unconventional one, avoid asking 'What would it mean if I did that?' Instead, ask 'What does it mean that *they* are doing that?' This helps separate your personal behavioral standards from their actual intent and worldview.
Instead of forcing a sale, elite salespeople act as advisors by proactively telling smaller companies when a solution is a poor financial fit. This builds long-term trust and prevents you from becoming the highest, most scrutinized line item on their P&L.
Diller emphasizes that once you learn about an internal issue—be it theft, unethical behavior, or a product flaw—a clock starts ticking. From that exact moment, every action or inaction is your responsibility. This principle establishes a clear line for accountability and demands immediate, decisive leadership.
Effective AI policies focus on establishing principles for human conduct rather than just creating technical guardrails. The central question isn't what the tool can do, but how humans should responsibly use it to benefit employees, customers, and the community.
Instead of focusing on process, allocators should first ask managers fundamental questions like "What do you believe?" and "Why does this work?" to uncover their core investment philosophy. This simple test filters out the majority of firms that lack a deeply held, clearly articulated conviction about their edge.
High-stakes industries like finance have a 'moral statute' that raises the bar for innovation. This deters many well-intentioned actors, leaving the field to those with either no moral compass or founders like Jack Bogle who possess extreme, near-prophetic conviction in their ideas.
