§3013 Board of Directors

Summary

The Bank must have a Board of Directors made up of 15 members. Each member serves a three-year term and may stay on until a successor is ready. The President can remove any member he appointed for cause. Three members are appointed by the President with Senate approval: one small-business proprietor from manufacturers or retailers (see 15 U.S.C. 632), one who is an officer of a U.S. agency or department, and one with strong cooperative experience representing low-income cooperatives that can borrow from the Bank. The other 12 directors are elected by holders of class B and class C stock under the Bank’s bylaws. The day after the Final Government Equity Redemption Date, all presidential appointees must resign except the small-business proprietor and one designated government officer appointee. Elected directors who were chosen before that date finish their terms. Appointed members may serve on committees, but no committee may have more than one such appointee. Elections follow the bylaws and nominees come from five cooperative classes (housing; consumer goods; low-income; consumer services; and other eligible cooperatives). When there are three or more shareholder directors, the Board must include at least one director for housing, one for low-income, and one for consumer goods/services. Nominees need at least three years’ experience as a director or senior officer in the cooperative class they would represent. No cooperative class may have more than three directors. A person may not be elected for more than two full consecutive three-year terms, and Bank officers cannot serve as directors. The Bank must give voting stockholders advance notice of nominees and nomination rules, and stockholders must share that information with their members. Each year the Board picks a chair and vice chair from its members and chooses a secretary who need not be a director. The Board makes the Bank’s funding and lending policies and directs management. It meets at least quarterly. Meetings are open to eligible cooperatives and invited observers, but the Board can set rules and may move to a closed session for privacy-sensitive matters like loan or personnel issues. Presidential appointees from U.S. agencies get no extra pay. The small-business and low-income cooperative appointees receive pay equal to the daily rate for GS–18 under 5 U.S.C. 5332 for days worked and travel pay like that in 5 U.S.C. 5703(b). Elected directors are paid as the bylaws provide. The Bank pays all directors’ compensation and expenses.