Companies are notorious for burying their blunders. “You can understand why the people who made the mistake want to make sure it gets forgotten before it makes an impact on their pay,” says Charles Munger, Warren Buffett’s business partner.
“It’s in the nature of humans and organizations, after they succeed mightily, to get very pompous and complacent,” says Mr. Munger when asked about Wells Fargo & Co., which has had repeated failures of risk management. “Lots of mistakes can then ensue….”
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This article was originally published on The Wall Street Journal.
Further reading
Jason Zweig, Your Money and Your Brain
Peter D. Kaufman (ed.), Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger
Jason Zweig, The Devil’s Financial Dictionary
Max H. Bazerman and Ann E. Tenbrunsel, Blind Spots: Why We Fail to Do What’s Right and What to Do About It
Benjamin Graham, The Intelligent Investor
Richard S. Tedlow, Denial: Why Business Leaders Fail to Look Facts in the Face — and What to Do About It
Jason Zweig, The Little Book of Safe Money