Board of directors

Governing body of a corporation, elected by shareholders to represent their interests in managing the firm. Directors adopt the bylaws and operating rules of a corporation, appoint its operating officers, and set the stock dividend rate paid to shareholders. Directors of national banks are required to own shares of stock in the bank and are elected by shareholders at an organizational meeting before the bank opens for business, and at regular annual meetings afterwards. Most large corporations have a certain number of Inside Directors who are also officers of the firm, and outside directors who are elected from the community at large. Each Federal Reserve Bank is governed by a nine-member board elected by Member Banks that own stock in the Reserve Bank in that region of the country. These boards have three separate classes of directors, who are named to serve three-year terms: Class A Directors, representing the member banks, and are usually bankers; and Class B Directors and Class C Directors, representing the interests of business, labor, and consumers. Class A and Class B directors are elected by member banks in a Federal Reserve district; Class C directors are named by the Board of Governors of the Federal Reserve System. Directors appoint each Reserve Bank's president, and first vice president, who serve for five-year terms, and name the district's representatives to the Federal Advisory Council which advises the Board of Governors on policy issues relating to bank supervision and regulation.