A FARMERS’ MUTUAL FIRE INSURANCE COMPANY. 7 
all-his knowledge of farm risks and mutual insurance principles, the 
secretary is seldom a skilled bookkeeper or accountant. In excep- 
tional cases it may be found expedient to elect a secretary who at 
the time has no farm property to insure and therefore can not be 
a member of the company in a technical sense. He may be a retired 
farmer, for example, who for years has been an active member of 
the company. 
While the directors as a body are responsible to the Hismbars it 
involves needless expense to have them meet to pass upon routine 
business. On the other hand, it is undesirable to leave too much to 
the judgment of a single individual. The best plan, probably, is to 
provide for an executive committee to pass upon all matters of 
importance which are more or less routine in their nature. The 
president, secretary, and vice president properly constitute such a 
committee. The first two are connected actively with the details 
of the business in any case. There seems good reason for making 
the vice president the third member of this committee, since his 
duties as a committee member will keep him in touch with all angles 
of the business and qualify him for the duties of acting president, 
which he may be called upon to perform. By this plan the regular 
meetings of the board of directors may be reduced to about four a 
year. Special meetings of the board should be called whenever any 
extraordinary problems confront the company. 
Another important committee for which all companies should 
provide is an auditing committee. It is almost impossible to over- 
emphasize the importance of a thorough annual audit of the books 
of the company. It is an added incentive to the officers in charge of 
the books to keep their records accurate and in good form. 
While cases of misplaced confidence appear to be rare in companies 
of this kind, nevertheless provision should be made to prevent the 
possibility of misconduct or misuse of funds. Even though the 
reputations of the officers are such that fraud on their part seems 
impossible, it is desirable to maintain sound business practices and 
to guard against insinuations by some disaffected member. The 
officers themselves should insist upon a thorough annual audit as a 
matter of self-protection. It may be desirable to have the books 
audited annually by an experienced accountant, but this involves 
considerable expense. Under ordinary circumstances, especially for 
the company of moderate size, the most practicable auditing com- 
mittee consists of members of the company. In a committee of three 
the chairman and at least one other member should be selected at 
the annual meeting from outside the board of directors. It may be 
well to have the third member selected by the board from their own 
number in order that no needless misunderstandings may arise. 
