The function of the board of directors is essentially one of general supervision of the bank's affairs, for actual management is delegated to an executive staff. The president is the active head of the organization and serves as the connecting link between directors and employees of the bank. There is always a close relationship between the directors and the president. Under the National Bank Act he must be a member of the board and may also preside at its meetings. It is the tendency among larger banks to relieve the president of the duties of chairmanship and to designate another director for the office. This appointee may be a president emeritus who is too advanced in years for active service, but who is well qualified by experience to give mature counsel. In a few large banks the chairman of the board is an active operating officer and actually has the powers of the president, who, in such banks, becomes a subordinate officer. Practice seems to favor the plan of vesting the duties of both president of the bank and chairman of the board in one individual.

The board frequently selects as president from its own number one who has been successful in operating a local enterprise. He has thus acquired considerable business experience which can be applied to advantage in directing the policies of the bank. However, his understanding of the technical phases of banking is often confined to the limited knowledge which he has gathered from attendance at meetings of the board of directors. As such training is insufficient for a full mastery of the technical details of operation, it has become the policy of some institutions to elevate to the presidency an officer who has risen from the lower ranks. In selecting a president the larger banks generally prefer the trained banker to the successful business man.

The duties of the president, as stated in the provisions of the National Bank law, are very limited, and in fact there is little legal difference between his power and that of any other director. The president is regarded as the representative of the bank in the event of litigation, and, therefore, is given the right to retain counsel, to defend the bank, or bring suit in its name. Although this is the only inherent power granted by law, the president in actual practice assumes a number of important duties. While these functions thus remain undefined by law, their extent is determined rather by the custom of the bank or the will of the president himself. As he is a member of the board of directors, he is in a position to influence the shaping of the bank's general policy. In fact, he is the intermediary who communicates the wishes of the board to the members of the staff. Subject to the final approval of the directors, the president passes upon loans made to borrowers, and also invests the surplus funds of the bank. The president must act as the representative of the bank in its dealings with the outside public, and in this capacity he is able to attract profitable business and new accounts to the bank. 6