Karen Banks is Elyse Keaton and Bill Channing's boss at the architectural firm. Her firm was responsible for knocking down the 200-year-old Morgan House and replacing it with a parking lot. In Working At It, she interviews Elyse for a job but comes across as so cold that Elyse is sure she wasn't hired, until Karen calls the Keaton house to tell her she got the job. Karen likes that Elyse was older and more experienced and that she was honest in the interview. When the Manhattan Corporation hires Karen's firm to design an office/health club, Karen assigns Bill to design the office and Elyse to design the health club.
By Season 4, Karen has been replaced by Ted Waterman.