It was Warren Buffet who said: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently”.

According to the Wall Street Journal, Warren Buffet recently got himself into a uncomfortable situation after all these years of having a rather spotless business reputation.  In January, David Sokol, a leading contender to succeed Buffet at Berkshire Hathaway Inc. suggested the company buy chemical company Lubrizol.  Sokol told Buffet he personally owned shares of Lubrizol.  Buffet later publicly disclosed in a formal statement that he never asked Sokol for more information on the trades.  Now the Securities and Exchange Commission is examining and likely will launch an inquiry into Sokol’s stock trading.  Sokol has resigned from Berkshire Hathaway and has personally profited from the Lubrizol stock purchases.

The WSJ further reports that the corporate-governance experts say Warren Buffet, the billionaire investor known for demanding truth and transparency, should have asked a few more questions.  If Buffet had asked more questions before proceeding with the purchase of Lubrizol might not be facing the government scrutiny since this has all come to light.  This could show gaps in Berkshire’s internal controls.

Although there may be nothing illegal here it puts both Warren and Berkshire Hathaway in an uncomfortable position.  If only Buffet had asked one more question.  Which may have lead to asking other questions then the situation may today be very different.

As a CEO, company president or business owner, think through everything you do in your business.  No matter how small or large.  Don’t overlook what appears to be obvious in your business.  Ask the right questions.  Ask the next question… and the next question after that till you have all the information you need so you can to make the best business decisions.  Don’t take short cuts because it can come back to haunt you and your company.  And that can prove costly – not just in dollars and time but also in professional reputation.  Which is something you can’t buy back or apply a quick fix to.