How Incompetents May Be Removed

If it happen that some of the stockholders get the belief that the board of directors is unfaithful or incompetent, and that the bank's safety or its well-being calls for their immediate removal, the discontented section can call a special general meeting of the stockholders "to be held at their usual place of meeting upon giving " six weeks' previous public notice, specifying therein " the object of such meeting." This course is permitted to "the directors of the bank, or any four of "them; or any number not less than twenty-five of the " shareholders acting by themselves or by their proxies, " who are together proprietors of at least one-tenth of " the paid-up capital stock of the bank."

The Annual Meeting

The annual general meeting is the regular occasion on which the directors formally appear before the body of the stockholders to give an account of their stewardship and to get a renewal of their office for another year. As a matter of fact, the annual meetings of a well-conducted bank are usually cut-and-dried affairs. The stockholders for the most part are content to leave everything in the hands of the directors. As long as things are apparently going right the directors submit year after year the list of names of board members, and with their own votes and those for which they hold proxies carry the election without opposition. It is hardly likely that any change in this respect will be seen in the near future, as the stock holdings are very much scattered in small lots all over the country.

Conferring With General Manager

There is, of course, conference about the bank's business between the general manager and some member or members of the board going on from day to day; but the regular formal intercourse occurs at board meetings. Usually there are two regular days in each week for meeting. A special meeting may be called at any time to consider an emergency or important transaction unexpectedly turning up.

The president is chairman of the board. He and the the vice-president, or vice-presidents, are elected by the directors immediately after the election of directors. At the board meetings each director has one vote; the president has a vote as well as the others, and, in the event of a tie, he has a casting vote besides. The vice-president is merely a director, who takes the president's place when the latter is absent, and succeeds him for the remainder of his term in the event of his demise or removal.

Business At Board Meetings

The directors are all busy men of affairs, and the proceedings of the board meetings are arranged so as to cause as little waste of time as possible. Very often there is routine business only to be transacted. At the previous meeting the board's secretary will have put in writing an account of what was done. These "minutes" he will have transcribed into the official book. The first thing to be done is to have them read and approved. On their being approved as correct or faithful, the record of that meeting stands as official.

The general manager submits the business that is to go before the board. A considerable part of this always consists of applications for new credits, for renewal of old ones, or of discussion as to the handling of debts and accounts held by the bank. It may be that among this is nothing of very much importance, and the directors may merely authorize the manager to take the action he proposes or confirm him in cases where he has already acted. But if there are important and weighty matters, involving large sums, coming before them it is necessary to have the particulars and circumstances more minutely described.

What A Director Should Know

When the board has formally authorized proceedings to be taken by the general manager, or confirmed those already taken by him, then the responsibility is on the bank. Prior to that, it rests on the general manager personally.

Although a director could hardly be expected to keep himself familiar with the day-to-day working of all the accounts in which the bank is interested at all its branches, he can, and usually does, know pretty well how the important accounts are running. And he must have a tolerably clear knowledge of the bank's affairs in general-its cash reserves, investments, policy, and condition.

There must be a large amount of trust reposed in the general manager. That cannot be obviated very well. A board of directors that meets but twice a week for a couple or three hours at a time cannot thereby acquire the knowledge necesary for thoroughly checking or supervising the executive manager in all that he does.

As already mentioned, the larger and more important banks have found that the work of the head office requires the employment of a high officer as assistant or lieutenant to the general manager; and this officer's position is usually strong enough to enable him to interpose an effective check on any disposition of the chief to misuse the bank's funds.

Where such a safeguard does not exist it has been thought advisable by some banks to have a special officer appointed to represent the board, and whose duty it is to follow the course of the active management, and to assure or certify to the directors that with the bank all is as the general manager says or claims.