The more layers a decision must pass through, the less anyone actually owns the outcome.
Munger and Buffett built Berkshire Hathaway on a quiet bet against conventional management theory: that bureaucracy is a tax on judgment, that committees exist as often to diffuse blame as to improve decisions, and that a company can stay lean at almost any size if it hires trustworthy people and then gets out of their way.
As an organization grows, more decisions compete for the same fixed amount of leadership attention.
Managers add managers, committees form to "coordinate," and every decision picks up another review step.
When ten people sign off, no single person owns the result — good or bad.
For decades, Berkshire ran a sprawling conglomerate of dozens of operating businesses and hundreds of thousands of employees from an Omaha headquarters staffed by only a couple dozen people. Munger and Buffett handled capital allocation directly and left operating decisions to the managers who actually knew the businesses.
At the smaller companies Munger personally chaired, he favored the same pattern at a different scale: a small board, direct personal oversight of major decisions, and a reluctance to build out corporate staff functions for their own sake.
Munger was openly skeptical of large financial institutions where risk decisions passed through multiple committees before the 2008 crisis — a structure that let obviously flawed judgments move forward because no single committee member felt personally responsible for stopping them.
Before adding a layer of review, ask whether it catches real mistakes or just spreads blame.
Give one person clear ownership of each decision — not a committee.
Hire for trustworthiness and judgment, then resist the urge to double-check them at every turn.
Treat every new manager, meeting, or sign-off as a cost to be justified, not a free safeguard.
Periodically ask: if we were starting today, would we design this many approval steps?
Munger's view, distilled: a business that needs a committee to make an obvious decision has usually already made its real mistake — hiring people who can't be trusted to make it alone.