Warren Buffett, chief executive officer of Berkshire Hathaway Inc. (NYSE: BRK.A) recently sent a letter to shareholders which said the board has selected a successor to the “Oracle of Omaha,” who has led the company for more than four decades.

However, he didn't identify the new pick and he even said the candidate hasn't been notified yet.

Buffett, who is now 81 years old, also refrained from discussing a timeline for the succession.

Wall Street greatly admires Buffett and many investors depend upon his stock picks – so he has carte blanche on how to run his company.

International Business Times spoke with an expert on corporate governance to discuss the renowned Buffett and his plans for succession.

Anna N. Danielova, Ph. D., Assistant Professor of Finance, DeGroote School of Business, Hamilton, Ontario.

IB TIMES: Warren Buffett has run Berkshire Hathaway for over 40 years as its chief executive. Is this a record for longevity? Are there other prominent executives who have led their companies longer?

DANIELOVA: Warren Buffett seems to be the second-longest serving CEO of a publicly-traded company. Roger Penske has been a CEO of Penske Automotive Group Inc. (NYSE: PAG) for 42 years.

Other notable long term CEOs are Edward Rust Jr., CEO of State Farm Insurance for 26 years, Joseph Neubauer, CEO of Aramark for 28 years, James Sinegal, former CEO of Costco Wholesale Corp. (NASDAQ: COST) for 28 years, Rupert Murdoch, CEO of News Corp. (NYSE: NWS) for 32 years until recently, Larry Ellison, CEO of Oracle (NASDAQ: ORCL) for 34 years, Bill Marriott, CEO of Marriott International (NYSE: MAR) for 39 years.

IB TIMES: Has Berkshire’s stock price moved dependent upon Buffet’s fame and popularity (that is, more than other company leaders are linked to their company’s underlying share prices)?

DANIELOVA: Although it's true that his name is better known than the name of the company he leads, there is no fundamental reason to believe that Berkshire's stock price has been marked up due to Buffet's popularity as an investment guru.

IB TIMES: While Buffet’s successor has not been named yet, do you expect the share price of Berkshire stock to take a short-term hit once the new boss is named?

DANIELOVA: I do not think so. I think investors are realistic about the fact that sooner or later Mr. Buffet is going to pass the helm to his successor.

IB TIMES: Historically, does the resignation or retirement of a prominent company CEO hurt the stock price?

DANIELOVA: Such anticipated events, as a normal retirement, referred to as “relay succession,” typically involve the identification and grooming of an heir apparent.

Since the capital markets are aware of the anticipated replacements of CEOs due to retirement, the stock market would not react abnormally to announcements of expected CEO succession.

According to a 1995 study, firms experiencing normal retirements of CEOs do not exhibit performance declines prior to a management change, but, in fact, they show small performance improvements with such changes.

IB TIMES: Isn’t it odd for a company to say they have found a successor, but they won’t say who he or she is and that the candidate himself or herself has not even been notified?

DANIELOVA: I am somewhat skeptical that the candidate has not been notified. Even if he/she was not notified yet, a successor will have to be notified soon for two reasons: (1) He/she needs to agree to the job. It is unlikely but not inconceivable to think that the chosen successor might not be willing to fill in such big shoes. (2) The successor needs to be groomed and prepared for the job ahead. How is he/she going to be prepared without being aware that he/she is a successor?

IB TIMES: Can you think of such a scenario in any other public company? Isn’t this an unnecessary distraction?

DANIELOVA: I think it is unusual to announce that a successor is found, without naming him, but this is not a distraction. I do not foresee Mr. Buffet retiring any time soon, so there is enough time for us to learn the name. Perhaps the whole idea was to inform the market that Berkshire Hathaway is on top of things and is cognizant of future inevitable succession.

IB TIMES: Buffet is 81. Do you think he will hang onto the job as long as he can because he is so intimately associated with Berkshire?

DANIELOVA: The market value of his firm is really based on the value OF Berkshire's holdings. Yes, it was him who acquired them all, but I do not think that his decision to stay will be influenced by any "imaginary hallow effect" his presence has on the stock price.

IB TIMES: Berkshire is unlike most other companies since it is basically a holding company for other firms. Isn’t the CEO of such a company basically a “babysitter” since his decisions are simply to make investment decisions? Or is running a holding company much harder than running a regular company?

DANIELOVA: I think we are comparing apples and oranges here. In addition, my understanding is that, if necessary, Mr. Buffet gets involved in decision-making process of the companies he has ownerships in.

IB TIMES: How is Berkshires’ board structured? Does Buffet have sole say in who the next CEO will be? Or does there have to be a consensus among board members?

DANIELOVA: Berkshire's board has 12 members presently, including Mr. Buffet, who is Chairman. I am sure Berkshire's board is subject to the same rules and regulations as any other public company in the US.

Moreover, the Sarbanes–Oxley Act has introduced new standards of accountability upon boards of U.S. companies or companies listed on U.S. stock exchanges. Typically, the members of the board of directors jointly choose one of its members to be chairman of the board.