4. Attendance At Meetings

Next may be considered the attendance of directors at the meetings of boards. In the large cities only a few banks have boards that largely attend with regularity. Bank directors usually have large business interests of their own, consequently they have but little time to bestow on other matters. Their irregular attendance is no disappointment, for usually before accepting office they frankly state their inability to serve with any regularity. If they were required to come twice a week, in many cases they could ill afford the time and would not accept. Most of them come occasionally; besides, the president always has the ready assistance of any director with whom he especially wishes to advise, so that in a very true sense directors often render effective service while not attending meetings. There is a western director of a New York bank who is rarely present, yet he is perhaps the most valuable magnet the bank possesses, and draws far more business into it than any of his associates. He is interested in many western banks, and an expression or wish from him that they will form business relations with the bank in New York in which he is a director is respected. They wish to please him, they intend to open an account with some eastern bank, and are quite as willing to do this with Ins bank as with any other, lie therefore makes a good account of his steward ship even though rarely meeting in formal conference his co-directors.

The same remark may be made of many non-attending directors. They do not forget their banks; they are shareholders as well as directors, and are eager to see them grow and pay good dividends. So they send customers to their banks, who in turn influence others to do likewise. Every hank seeks to have a board of live directors who will keep good balances themselves, and are able to influence others to put their deposits in the same place.

Every now and then it is discovered that a bank has gone to seed. What is the matter? Depositors have died or withdrawn and the board of directors is composed, it may be, of very worthy men who perhaps attend the meetings with great punctuality, but can not command any new business. Perhaps they are men out of business, and have no influence with other men. Unless a bank has become very large and attained a strong impetus, it is always a matter to be carefully considered how many men of this type it can afford to keep on its board. Some of them may be large shareholders and insist on representation at the board, having subscribed for their stock with this expectation and assurance. In such cases their wishes should not be lightly disregarded.

There are banks in which the attendance of directors at stated meetings is very slight, but who frequently, perhaps every day, appear and make inquiries concerning its business, examine the paper discounted, or that may have been presented awaiting action. They may tell the president what they think of A's or B's application, what they know about his business or worth, in short, the president may be as fully advised by such directors as though they were actually present at board meetings. Doubtless there are more directors of this kind than the public imagine, so that while directors' meetings are often very brief perfunctory gatherings, banks often have their guidance as constantly as though they were formally present at stated meetings.

Is the requirement legally imperative that a director should generally be present? This question arose in the first case tried by the Supreme Court of the United States determining the liability of national bank directors. It so happened that among other directors affected by this decision was Mr. Spaulding, Chairman of the Ways and Means Committee that framed the measure. He was a director of the First National Bank of Buffalo, and the president having ruined it, the directors were sued by the creditors for neglecting their duties, and thus contributing to its downfall. One of the charges of neglect was the absence of most of the directors from the meetings. One was sick and in Europe and had not attended for a long period. Mr. Spaulding himself had become an old man and infirm, and it was difficult for him to attend. Some of the directors, however, had not so good reason to justify their non-attendance.1

If directors were required to attend with a considerable degree of regularity, many would at once resign, for the) could not come without neglecting their own business. Their banks would then be obliged to elect others, men perhaps retired from business who would have time to attend and be regular in coming, but whose assistance would not be worth much from any point of view. The most that could be said of their assistance would be that in forming a quorum each would count one.

1The court speaking through the chief justice and adopting the opinion of another tribunal remarked: "The duties of directors are those of control, and the neglect which would render them responsible for not exercising that control properly must depend on circumstances and in a great measure be tested by the facts of the case. If nothing has come to their knowledge to awaken suspicion of the fidelity of the president and cashier, ordinary attention to the affairs of the institution is sufficient If they become acquainted with any fact calculated to put prudent men on their guard, a degree of care commensurate with the evil to be avoided is required, and a want of that care certainly makes them responsible." Mr. Spaulding and his associates were not therefore regarded as responsible for the conduct of the president of their bank. Briggs v. Spaulding, 141 U.S. 132.

Among the country banks attendance of directors is more usual. This is for the reason that the money lent by their banks is lent under their direction. In the cities, as we shall soon learn, a different practice prevails. The country banks therefore adhere more closely to the original practice, and while there are some departures they are not very common. In the larger cities, especially, the general attendance of directors is exceptional. In a few banks, and in a few only, do many convene.