third, etc., vice-presidents, each having specific duties connected with the regular business. Such vice-presidents may receive such compensation as their services merit; an inactive vicepresident will usually receive no compensation. The office is frequently merely an honorary one, offered to some prospective stockholder to secure his more active influence, or it is given to some person of influence whose name counts for much in the community or line of business in which the corporation is engaged.

§ 50. The Secretary.

The common duty of a secretary is the conduct of the routine business of a corporation. He is the custodian of the corporate seal, and of the corporation books; he keeps and reads the minutes of the meetings of stockholders and directors; issues calls for meetings; notifies officers and directors of their election; issues, seals, transfers and cancels certificates of stock, and sometimes signs them with the president (when it is not provided that the treasurer shall sign); closes the transfer book at proper time; affixes the seal to formal instruments, and attests with his signature; prepares the reports which are required to be made to state officials; prepares statistics for reports to be made by the president to the stockholders and directors; attends to the correspondence of the corporation or has supervision over it; and performs all duties imposed by the directors, or which custom in transacting the corporation business has made part of his duty. All contracts made within the range of his customary work will be binding on the corporation. The secretary should be a man of perspicacity, energy and honesty, and should have a general knowledge of elementary corporation law and be familiar with corporate practices, should know something of commercial law and practices, should be familiar with the general principles of corporate finance and accounting, should understand parliamentary law, and be familiar with the corporation statutes of the state under whose laws the corporation was organized and of that in which the principal business is located.

The secretary of a corporation is usually an information bureau for the other officers and directors.

$51. The Treasurer.

The general financial agent of a corporation is the treasurer. He is the routine financial manager of the corporation, and has charge of money, notes, and any fund securities belonging to it, as well as of its books of account. He sees to all expenditures and requires receipts and vouchers therefor, and issues receipts for moneys paid to the corporation. If he does not perform this work himself, as he seldom does in large corporations, he superintends the clerical force that does the actual work. Hence, he should be familiar with the principles of corporate finance, and should have an accurate and comprehensive knowledge of bookkeeping and accounting. In many of the small corporations, the treasurer is the bookkeeper. Usage often determines the power of a treasurer to sign notes or to contract on behalf of the corporation. But it is a matter of prudence to define his powers and duties somewhat explicitly in the by-laws. The treasurer commonly signs certificates of stock; indorses for deposit or collection checks, notes, bills, and other negotiable instruments; signs, with or without the president, as the by-laws provide, the checks of the corporation (he should sign with the corporation name, "per James Sully, treasurer"); joins with the president in the execution of all instruments that have to do with the corporation's financial proceedings; makes reports of the corporation's financial condition to the annual meetings of stockholders, and so keeps in touch with the financial affairs that he is ready at a moment's notice to state to the directors the assets, liabilities, or details of any financial transactions of the corporation. If there is a finance committee, some of this work may have been assigned to it to the relief of the treasurer. A treasurer should always deposit a corporation's funds in the name of the corporation. Where a treasurer's position is a responsible one, on account of large transactions and the handling of much money, he is usually requested to give bond. It is better

that such bond be secured from a reliable and responsible fidelity insurance company. Such company will keep closer watch over the treasurer's performances, and will take more pains to detect anything irregular in them, than a personal surety, and it will also be more fearless and energetic in prosecuting actions against a defaulting treasurer. The compensation of a treasurer will vary from that of an ordinary bookkeeper to that of an expert financial manager.

§ 52. The Managing Director and the General Manager.

Sometimes a board of directors of large corporations will appoint one of their number a managing director, whose duties will supplement those of the president. When a president who serves in a managerial capacity is often absent from the business, a managing director is a convenience, as he can take the president's place and perform those ordinary duties pertaining to the regular conduct of the business that the president would perform. His duties should be defined in a by-law, or in the resolution by which he is appointed, when his office is temporary. Sometimes there is a managing director where there is also an active president, and in such cases his duties should be specified carefully, so that he will not come into conflict with the president.

The general manager of a corporation attends to the supervision of all the active commercial or industrial business, such as the manufacturing and selling of goods, etc., in distinction. from the corporate business. His duties may be assigned him by the directors or the president, and he reports to one or the other. When he is a director, his office is not much different from that of a managing director. Otherwise the position is not so high as that of managing director, as it is more that of an employe, depending upon the contract of employment.

$53. The Counsel.

Large corporations retain a salaried lawyer, who works under the direction of the directors or the president. The advantage

of a regularly employed attorney to counsel with the officers and directors, to prepare contracts and agreements, and to inspect contracts and agreements sent for acceptance, is apparent enough. Much unnecessary litigation may thus be avoided. The counsel is usually paid a retainer of from one hundred dollars up, according to the advice necessary to be given and work to be done, and is paid extra for all litigation in which he takes part during the year. (See Miscellaneous, The Corporation Lawyer.)

$54. The Auditor.

Many of the largest corporations employ an auditor who superintends the bookkeeping, the financial system and reports, and all matters of corporate and business statistics that usually come within an auditor's or accountant's purview. He should not be a partisan of any stockholder or group of stockholders, and should be the most independent employe of the corporation. If a regular auditor is not employed, a corporation may employ an expert often enough to certify the books and accounts. (See Part VII.)

An auditing committee, composed of stockholders or directors, unless there are members who are familiar with bookkeeping and accounting practices, is inefficient for the needs of large corporations. Moreover, their work is usually done very superficially, and also they may be interested in making a form of report which will not disclose all the facts that should be shown. More general use should be made of the permanently employed or the occasional professional auditor.

§ 55. Committees.

As has been noted, a board of directors does not generally have the power to delegate the right to exercise discretion which is vested in it. Therefore, the duties of such standing committees as executive and finance committees, which are composed of members of the board and may have supervision respectively of the general business and financial affairs of the corporation,

should be clearly defined in the articles or by-laws. The more specific provision for the duties, and the less discretion in their performance, the better, since the law on this subject has not been adjudicated to any great extent. It is not an uncommon practice, however, among the directors of business corporations to delegate part of their discretionary authority to committees. In New Jersey it has sometimes been provided by charter that an executive committee may exercise all the powers of the board whenever a quorum of the board is not present at a board meeting, as well as at times when the board is not in session.