“Key Man Risk” is the threat posed to a company from over-reliance on the skills of one or a few individuals.

When ratings agency Fitch lowered Berkshire Hathaway’s rating from AAA to AA-plus, they noted:

[Berkshire Hathaway’s] ratings also continue to reflect Fitch long-standing concerns with respect to “key man” risk in the form of the company’s chairman, Warren Buffett. Fitch views this risk as unrelated to Mr. Buffet’s age, but rather Fitch’s belief that [Berkshire Hathaway’s] record of outstanding long-term investment results and the company’s ability to identify and purchase attractive operating companies is intimately tied to Mr. Buffett.

On a related note, “The Bus Number”: how many people can get hit by a bus before a particular function can no longer be performed by the company.

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