Working with as many associations as we do, we have seen lots of bylaws. Some are well done, and others are a total mess. Most are somewhere in between, with a review overdue.
Many board members find bylaws intimidating and so they tend to file the bylaws away. Some organizations are very rigid in their interpretation, to the point of slowing progress. How do you find the right balance?
My approach to bylaws review is simple. Either follow the bylaws or change them. Boards have the power to amend their bylaws or rewrite them completely. Sometimes it is simpler to start over than to repair a deficient set of bylaws. Generally, a review every year or every other year is a good idea. That will keep the bylaws in sync with the needs of the organization, which is continually evolving.
Think about bylaws as defining the structure or framework of the association. Bylaws are not about policies, procedures or operations.
I was involved in creating my first set of bylaws back in 1980. The attorney we were working with provided us with a template. His advice was very wise. “Keep it simple and flexible.” I would add “realistic” to the list.
EXAMPLE
Bylaws should include a statement about an annual meeting. Legally, organizations need to have an annual meeting, and that needs to be specified in the bylaws.
A Poorly Drafted Statement:
The annual meeting shall be the second Tuesday in November at 7 p.m. at the Jackson Hotel.
A Better Approach
The annual meeting shall be the second Tuesday in November or any such other date, as well as time and location specified by the Board of Directors.
Obviously, there are circumstances beyond anyone’s control that might impact the date, time and location of the annual meeting. Maybe it will snow. Maybe they will tear the hotel down at some point, and maybe the board prefers to meet earlier because they are aging and don’t want to drive at night. Flexibility is key.
Organizations should have bylaws, but they also need a Policy/Procedures Guide. This document should contain the details of operations. It should be reviewed annually, and it should be possible to change it with a simple majority vote of the Board.
Here are a few common problems with bylaws.
- Purpose Misalignment – Organizations are required to operate consistent with their purpose. That purpose is stated in the articles of incorporation. The bylaws should match that purpose.
- Inaccurate Officer Job Descriptions – Often bylaws will state that the secretary will take the minutes and that the treasurer will keep the accounting records. That is fine, if the organization is all volunteer. When management comes in, they often do these tasks. The roles of the secretary and treasurer shift to oversight, and the bylaws should change accordingly.
- Unrealistic Quorum – In order to act, a quorum is needed. If the quorum is too difficult to achieve the organization will be unable to act. If the quorum is too low, a few people could take control.
- Board Size – Board size matters, but some flexibility is important. A very small board becomes a dangerous concentration of power. A board that is too large becomes unwieldy. For most boards the sweet spot is between 9 and 17 members. It is best to set a range in the bylaws.
- Election Process Details – It is enough to state in the bylaws that an election will be held in a certain month, or at another date selected by the Board of Directors. The Nominating Committee’s charge should be listed in the committee description in the bylaws. The rest of the details should be included in the Policy and Procedures Guide.
- Failure to Specify Term Limits – In general, term limits are a good idea because they ensure that new leadership will be continually emerging. There are times, however, when there are no new leaders emerging and the current board is willing to stay in place. A revision would be needed to keep the group going while it focused on recruiting new leaders. This might be more than a one-year process.
- Executive Committee Issues – Most groups have an Executive Committee. It is possible to give the Executive Committee too much power. They should be limited to taking actions on behalf of the board to the between board meetings, or when specifically authorized by the board to act on its behalf. Any financial decision should be spelled out in the minutes, with actions taken be reported to the Executive Committee.
- Failure to Name Parliamentary Authority – The Board has the choice of Robert’s Rule of Order or Sturgis’ Standard Code of Parliamentary Procedure. Sturgis’ is commonly specified by medical societies. If there is no Parliamentary Authority named in the bylaws, state law will apply and that might not be a fit for the organization’s needs.
- No Dissolution – Bylaws should have a statement about what happens if the organization dissolves. The assets typically per state law must go to another organization with a similar mission and IRS tax status.
- Bylaws Changes Process– Bylaws changes are usually needed because of the bylaws review. Most organizations require 30 days advance notice for bylaws change votes. A vote to change the bylaws generally requires a 2/3 majority vote to pass. The notice period and majority should be spelled out in the bylaws.
The Bylaws Committee typically works many hours in the review and changes. We recommend keeping a master of the most current bylaws in MS Word. While the published version of the bylaws should be in PDF format, it requires special software to modify PDFs and even then, there are font matching issues. It is important that a version of the bylaws tracking the changes made from the previous version and a final version of the approved document be archived with management, the secretary and president. Each time the bylaws are revised, the revision date should be listed on the first page.
Functioning within the bylaws is important, but it is more important to have a healthy organization. Don’t ever substitute working on bylaws revisions over solving pressing problems. In some situations, revising the bylaws can be synonymous with arranging the deck chairs on the Titanic.
Don’t think of bylaws as aspirational goals that you may or may not reach. Don’t put something in the bylaws that you cannot realistically make happen once the bylaws changes are accepted.
