Eight Tips When Reviewing Your Bylaws

Recently I was leading a governance strategic retreat, which is one of my favorite professional training services I offer, and I asked a question to the board about how many board members does your bylaws allow.

A member replied, “nine”.

I counted the members in front of me, looked at the board and said, “Well there are 10 of you here, so I hope not. When was the last time you reviewed the bylaws?”

We pulled the bylaws and identified that seven was the max! They had been out of compliance for years based on their own bylaws.

This is just one of the many common mistakes I see in governance bylaws...many were written so long ago they are out of touch with the school's current structure. 

Here are some other common mistakes you might find in your bylaws.

• Bylaws having policies embedded: The bylaws should be structure in which the board operates. This includes number of members, terms, term limits, definition of quorum, and officers responsibilities. This is not a place for board or school policies such as membership criteria, membership dues determinations, and the operation of committees. Board policies should be placed into a single physical and/or electronic policy manual. Bylaws generally should be a relatively concise and easy-to-navigate document, leaving the details to policies, which can be more easily revised in the future. This way, bylaws will not need regular amendment.
• Voting by proxy: There is no voting by proxy here in North Carolina, that means voting by email, text or written ballots. Check your state's open meeting laws to see what your rules are. 
• Inconsistent with other board documents or State laws: Be sure to double-check your bylaws for both internal consistency as well as external consistency (including keeping in line with the articles of incorporation, the state's nonprofit corporation act, and any policy or governance manual).
• Doesn't Address Compliance Risky Scenarios: Sometimes, for example, bylaws will contain a provision about removing a board member, but leave out any provision covering how that position gets filled upon removal. It is important to take the time to carefully walk through all of the “what-if” scenarios to avoid holes in the bylaws. 
• Inflexible Rules: How the organization functions today may not be exactly the same as it will need to function in the future. Building flexibility into the bylaws, such as including a range for the exact number of board members and allowing the board to designate additional officers not named in the bylaws, can help the organization moving forward. Bylaws should provide an outline of the governance structure but also should allow some flexibility if and when changes are needed in the future.
• Inflexible and Unclear Member Approval Process: It is important to note the required timeline (term start dates and required voting, i.e. super majority) at the beginning of the process, so that your organization does not go through the entire bylaw review process only to realize it will be another year before the required membership approval can be obtained due to failure to adhere to the minimum notice period.
• Difficult to Amend Bylaws: Some bylaws may require that amendments be approved by a two-thirds vote of the membership (for organizations with voting members), or contain other super-majority or burdensome requirements for approval, or worse a to-thirds member vote when members are the parents of current students (true story!). Focus on creating a bylaw amendment provision and process that is not overly difficult to execute and that is appropriate for the history, culture, and politics of your organization. Note: bylaws typically need approval by the State's authorizer and should be amended rarely. 
• Executive Committee: No board needs an Executive Committee (EC), this is what you hire the Executive Director to do. Make decisions that move the school towards its goals. Too often I see an EC gaining too much power. Let's be clear. The members of the EC do not have any more power than any other board committee or board member. They make recommendations to the FULL Board. If you have one, I highly recommend you dissolve it. 

Keeping the pulse of the bylaws should be the job of the Governance committee and the Head of School so they can speak up at meetings when issues implicating the bylaws are discussed. Some organizations I partner with place the bylaws as an agenda item at each annual meeting of the board of directors, to prompt consideration. At minimum, you should review them twice a year as a full board. 

At the same time, as discussed above, well-drafted bylaws should be flexible enough to not require regular amendment, and constant deliberation over revising the bylaws generally is unhealthy, unproductive, and diverts attention from the more pressing business and issues facing the organization.

If you would like me to review your bylaws and provide feedback, simply send an email to [email protected] with a copy of your bylaws and I will send you free feedback. I would be happy to take a look and talk through what I see. 

Note: This article, or my feedback, are not intended to provide legal advice or opinion and should not be relied on as such. Basically, I won't be defending you in court but I can be a cheaper resource until you get to your lawyer's final review!

Keep making a difference,

Dr. Tom

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