6 BULLETIN 530, U. S. DEPARTMENT OF AGRICULTURE. 



While factional difficulties have been rare in the farmers' mutuals, 

 they are by no means unknown. 



Since the directorate represents the members, a vacancy in the 

 board should theoretically be filled by election in the manner in 

 which the position was originally filled. An extra meeting for the 

 purpose of filling such a vacancy, however, involves considerable 

 trouble and expense, and it is perhaps well to provide that the 

 remaining members of the board shall fill the vacancy temporarily, 

 the one so selected holding office only until the next regular meeting. 



The board of directors, subject to the' articles of incorporation and 

 the by-laws, should have full and complete charge of the business 

 of the company. The limitations upon its powers provided for in 

 the by-laws should be such as affect the broader policies of the com-, 

 pany only. Details of administration should be left in general to 

 the discretion of the board. Without discretionary powers in these 

 matters the directors are not in a position promptly to meet new 

 conditions that may arise, nor can they properly be held responsible 

 for the efficient management of the company's affairs. All officers 

 and employees should be elected or appointed by the board or its 

 representatives and should hold office only so long as they discharge 

 their duties faithfully and efficiently. The compensation of all such 

 officers and employees should be fixed by the board. Only the com- 

 pensation of the directors themselves should be stipulated in the 

 by-laws. 



OFFICERS AND COMMITTEES. 



There are good reasons why the regular officers should generally 

 lie elected by the board from their own number. It is probable that 

 the members will have elected as directors the men in the com- 

 munity who are best qualified to transact the company's business 

 for them. Hence to insist that the officers be elected from outside 

 the board may deprive the company of the active service of its best 

 qualified members. The officers acquire an experience and a practical 

 insight into the business which should be made to count in the 

 directors' meetings. Especially is this true of the secretary and the 

 president. The duties of the treasurer, however, as ordinarily pre- 

 scribed, bring him but little into touch with the actual insurance 

 business, and this office may well be held by any responsible person. 

 regardless of other connection with the company. An official or 

 responsible employee of a local bank often makes a desirable treasurer, 

 since he usually has the requisite training and the conveniences for 

 keeping accurate accounts with a minimum of labor and expense. 

 Moreover, his methods of keeping accounts may give the secretary 

 valuable suggestions in regard to the keeping of his books, for, with 



