Jeremy Phillips asks Austin Smith whether Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) will stand the test of time or follow the path of many other great companies that have languished after the departure of their greatest leader, citing Microsoft, Starbucks, and maybe even Apple.

Austin Smith says that when visionary CEOs leave and hand over the reins to their operations guys, e.g., Steve Jobs to Tim Cook, companies stagnate. But Berkshire isn't a creative empire reliant on new product development a la Microsoft or Apple. Its components, such as GEICO, can and do run on their own. Buffett's job is merely to allocate the capital that Berkshire's subsidiaries generate. Therefore, Smith concludes that Berkshire will continue to thrive, especially since Buffett has promoted excellent capital allocators to top positions. Phillips comments that Buffett's hands-off managerial style has been just as integral to Berkshire's success as Buffett's investment prowess has.