Under the Federal Reserve Act, the Head Office of each Reserve Bank has a board of nine directors, all chosen from outside the Bank. They are divided into three classes—designated A, B, and C—of three persons each. The Class A and Class B directors are elected by member banks of each district—banks that own stock of the Reserve Bank. The Class C directors are appointed by the Board of Governors. The Act specifies all directors shall be chosen without discrimination as to race, creed, color, sex, or national origin.
For the election of Class A and Class B directors, the law requires that the member banks of each District be classified into three groups based on the amount of capital—small, medium, and large. Each group of banks nominates candidates and votes for one Class A director and one Class B director.
Class A directors represent the member banks; Class B and Class C directors are selected to represent the public “with due but not exclusive consideration to the interests of agriculture, commerce, industry, services, labor, and consumers,” according to the Federal Reserve Act. In addition to these six sectors, which are used by the Federal Reserve System as a guide for achieving diversity and balance in the backgrounds of the directors, Class B and Class C directors have been drawn from backgrounds not mentioned specifically in the Act. Reserve Bank directors are drawn from diverse backgrounds so various viewpoints will be brought to bear on decisions related to the administration of the Reserve Banks, as well as upon decisions and advice with respect to monetary policy and other policies.
Each Branch board of the San Francisco Reserve Bank consists of seven members. Branch directors are appointed by the Head Office Reserve Bank or the Board of Governors. Reserve Banks appoint four of the directors who must meet the occupational and eligibility requirements of the Head Office Class A or Class B Reserve Bank directors. The Branch directors appointed by the Board of Governors must meet the occupational and eligibility requirements of the Head Office Class C directors.
Tenure and Rotation
Reserve Bank directors and Branch directors are elected or appointed for staggered three‐year terms. When a director does not serve a full term, the successor director serves the unexpired portion of that term.
Leadership of the Boards
Reserve Bank Boards: Each year, one Class C director at each Reserve Bank is designated by the Board of Governors as chairman of the Bank’s board of directors, and a second Class C director is designated deputy chairman.
Branch Boards: One of the directors appointed by the Board of Governors at each Branch is designated annually by the Head Office board as the chairman of the Branch board.