At Berkshire Hathaway, chairman Warren Buffett and his right-hand man Charlie Munger search for specific traits when hiring the company's board of directors and managers.
"At Berkshire for decades, we've given the three factors in addition to integrity for board membership," Buffett said on CNBC's "Squawk Box" on Monday. "We want people who are business-savvy, we want them to have a strong personal interest in Berkshire itself and we've got directors who really represent shareholders at Berkshire."
And to show a "strong personal interest" in Berkshire, Buffett prefers that directors purchased company shares with their own personal savings.
"Paid-with-my-own-money ownership, of course, does not create wisdom or ensure business smarts," Buffett wrote in his recent letter to shareholders. "Nevertheless, I feel better when directors of our portfolio companies have had the experience of purchasing shares with their savings, rather than simply having been the recipients of grants."
This isn't a new stance for Buffett – in May 2014, he told Becky Quick on CNBC's "Squawk Box" the same.
"We have a group of directors, they get paid virtually nothing and their interest has to come about because they find the place interesting and in many cases, because they have huge investments [in Berkshire companies]," he said. "And they made those investments themselves. Nobody gave them shares. So, it's a very unusual board, but it's a terrific board."
In addition to personal investment, Buffett looks for good character traits.
"Thought and principles, not robot-like 'process,' will guide their actions," he said in his recent letter to shareholders. "In representing [shareholder] interests, [the board directors] will, of course, seek managers whose goals include delighting their customers, cherishing their associates and acting as good citizens of both their communities and our country."
Above all, Buffett wants board directors that will uphold the same values Munger and he have for Berkshire, rather than sell out to Wall Street.
"I personally want directors that represent the shareholders. And, you know in terms of my estate you know, with maybe currently $80 billion worth of [Berkshire] shares to give to philanthropy, I hope that we have a group of directors that I think will be very conscious of doing the right thing," he told CNBC on Monday, referring to his pledge to give away 99% of his wealth (which is mostly comprised of Berkshire stock).
Similarly, Buffett looks for three key things when hiring employees: "You look for intelligence, you look for energy and you look for integrity," he told Nebraska Business magazine in a 2001 interview.
The most important of all, according to Buffett, is integrity.
"Every business student you have has the requisite intelligence and requisite energy. Integrity is not hard-wired into your DNA," he said in 2001.