Chairman of the Kansas City Federal Reserve Bank. He worked his way up to the chairmanship of a regional Federal Reserve Bank. This is only one step below the chairmanship of the entire Federal Reserve System (the top banking position in the country). This position allowed him to see how monetary policy is made from the inside, and understand the political forces that impact the monetary system.
Cain was Chairman of the Board of Directors for the Kansas City Fed which is not the same as being the Chairman of the Branch. The Branch doesn't have a chairman at its head, it has a president. Additionally, the chairman of the local board of directors is not one step below the chairmanship for the entire system. One step below the chairman of the entire system is the Deputy Chairman of the Federal Reserve.
The local branch Board of Directors is appointed by the branch President and serve at his discretion. The board is made up of 9 people from the geographical service area (3 banking executives/economists, 3 community development type economists, and 3 local industry executives (this is the group Cain was in)). Those 9 members elect their chairman (and a vice chair). The board only meets a few times a year (I think it's monthly or bi-monthly) and discusses local economic issues and makes suggestions to the bank president regarding policies and interest rates. From my understanding, the presidents generally do not pay much attention to what the board says regarding general policy decisions but they do have a bit of influence over the discount rate and then by proxy, the overnight rate that local banks charge. The chairman of the board of directors at the local Fed branches additional duties are to make sure the meetings run smoothly, that the members are contributing like they are supposed to, and that their staff is putting together the minutes and other publications that are supposed to be done.
Being on the board of one of the local Federal Reserve branches, or even being its chairman, is a long way removed from being the chairman of the entire system.
All that being said, being appointed to the local Board of Directors is still somewhat impressive because it shows that the local president had enough faith in your abilities to be willing to listen to you regarding the issues once a month or so.