Annual Report - CoBank

Board of Directors Disclosure as of December 31, 2011CoBank, ACBDirectorsCoBank’s bylaws authorize a Board of Directors consisting of 15 to 17 members. As of December 31, 2011, the Board consistedof 16 directors, as follows: (i) four directors elected from each of our three regions (east, central and west); (ii) two Board-selectedoutside directors (independent of any customer or Farm Credit System affiliation); and (iii) two Board-appointed (customer affiliationpermitted) director positions. Director terms run for four years. Employees of Farm Credit System institutions, including CoBank,cannot serve on CoBank’s Board of Directors within one year of employment.During 2012 and as a result of the merger with U.S. AgBank, FCB, CoBank will be governed initially by a 32-member board ofdirectors, the majority of which were elected by our customers. On January 1, 2013, the board will transition to an ongoing board ofdirectors consisting of 24 directors elected from six different geographic regions. The board will also elect 2-5 outside and appointeddirectors to complement the expertise of the customer-elected board members resulting in a board of 26-29 members.Director IndependenceThe Board must be composed at all times of at least 75 percent of directors who are deemed to be independent. The Board hasadopted standards to assist it in making the annual affirmative determination of each director’s independence status. A director will beconsidered “independent” if he or she meets the 14 criteria for independence set forth by the Board, which were established basedupon leading industry practice and the listing standards of the New York Stock Exchange. For example, the loans from CoBank to anaffiliated Association or Title III customer, as defined by the Farm Credit Act, where a CoBank director is also a director must notcomprise more than 20 percent of the total loans of CoBank. In addition, the Board has made a determination as to each independentdirector that no relationship exists which, in the opinion of the Board, would interfere with the exercise of independent judgment incarrying out the director’s responsibilities. In making these determinations, the Board reviewed and discussed information provided bythe directors and by CoBank with regard to each director’s business and personal activities as they may relate to CoBank andCoBank’s management. As of December 31, 2011, 15 directors were considered to be independent.Information About Committees of the Board of DirectorsThe standing Board committees consist of the following: an Audit Committee, a Compensation Committee, an ExecutiveCommittee, a Governance Committee and a Risk Committee. The Board has adopted written charters for each of these Boardcommittees. The full text of each charter is available on our website at www.cobank.com.All standing Board committees report on their meetings at the regular meeting of the full Board. Minutes of each committeemeeting are signed by the committee chair and secretary, or another individual acting in their place at the meeting.In 2011, the Board of Directors held six regular meetings and standing committees of the Board of Directors held a total of 32meetings. The primary responsibilities of each committee are described on the following pages.CoBank 2011 Annual Report118