Warren Buffett retired as Berkshire Hathaway (NYSE:BRK.B) CEO at the beginning of the year. However, he still serves as chairman of the board – at least for now.

However, investors must wonder what will happen to the company on the sorrowful day when Buffett disappears from it completely. There are essential risks to consider.

Buffett’s shares

The problem for Berkshire shareholders has two parts. First, Buffett has been an exceptionally good company leader and will be extremely hard to follow.

In this case, I think there is reason to be sanguine about Greg Abel. The up-to-date CEO wasted no time in getting to work and deciding to sell his shares in the company Kraft Heinz.

More generally, Abel has a reputation for being much more involved in Berkshire’s subsidiaries than Buffett. And this may be what the company will benefit from the most in the future.

Berkshire’s size means it’s hard to find acquisition opportunities that could impact the company’s earnings. So a CEO focused on improving existing operations may be what’s needed.

Buffett’s shares

Another issue for Berkshire shareholders is what happens to Buffett’s stake in the company. These are to be distributed to various philanthropic organizations, but what next?

These organizations are likely selling shares because they want or have to. And this creates a risk that they will fall into the hands of activist investors.

New shareholders could push for changes that could cause the share price to skyrocket in the compact term but would not be in the company’s long-term interest. And that’s a risk.

Buffett owns about 15% of Berkshire’s business interests, but the nature of the Class A shares means he owns more than 30% of the voting power. So someone who buys them can make a very massive difference.

Berkshire Defense

Buffett’s shares are worth about $150 billion, so it would be very hard for any person or organization to buy the stock. But it’s not completely out of the question and it’s a risk I’ve been thinking about.

Over the last few years, Berkshire Hathaway has increased – very significantly – its cash reserves to $382 billion. That’s more than enough to buy Buffett’s stock when the time comes.

In other words, Berkshire can stop a would-be activist by buying Buffett’s shares before anyone else does. The company did something similar earlier, in 2012.

This would also benefit investors by reducing the number of shares outstanding. While the company needs cash to cover potential insurance liabilities, $200 billion should be enough.

Berkshire without Buffett

Investors are wondering why Berkshire Hathaway is building up huge capital reserves. Buffett has been saying for some time that it’s not because he expects the stock market to crash.

One potential reason, however, is that it puts the company in a robust position to handle Buffett’s stock sale. And it’s not just about fending off potential risk.

The buyback of approximately 15% of the company’s capital should bring huge benefits to current shareholders. That’s why I’m holding the stock and why I’m still a buyer at today’s prices.