Revising your By-laws?

Boards of Directors should review – and consider if they need to revise – their organization’s by-laws (in Ohio called Code of Regulations) on a regular basis.

When was the last time you looked at yours? Go ahead; pull them out. I’ll wait.

You’re back? Good! Let’s begin.

Does your board meet as scheduled? Most by-laws state that boards will meet, at a minimum, quarterly. My understanding is it is fine if you meet more often. It’s not fine if you meet less often. (This would be a good time to remind you that I am not a lawyer.) If you are only meeting quarterly, I encourage you to meet more often. It’s like the nonprofit version of that old commercial- miss a meeting, you miss a lot.

Do you have the right number of board members? Most initial by-laws are written with three members, though three members are rarely enough to appropriately govern an agency. If your by-laws say three members, I encourage you to consider revising them. I like a range.

For more detailed information on the number of board members, the frequency of meetings or the structuring of by-laws, I encourage you to read How Many Board Members Meeting How Often and Creating a New Nonprofit.

I offer a few more questions for your consideration as related to your by-laws:

Are new members added as stated? Do you follow the process to elect officers and re-elect renewing members?

Do you have a process to remove board members?

Do the committees listed reflect the committees you have? Are those the committees you need?

Do you have dissolution and indemnification statements?

Do you have things in there that should be elsewhere? Conflicts of Interest policies usually stand alone. So do Financial Policies.

Which governance model do you follow? Is that in there? Does it need to be?

What title do your by-laws offer to both your executive leader and the president of the board? Are those the titles you use?

Titles have evolved during my career. It used to be that the senior executive was called the executive director and the leader of the board was called the president.

It is my understanding that the YMCA was the first large organization to challenge that notion. The YM, once upon a time, had branch directors who were expected to raise money in their communities but were having trouble getting in to see business leaders. They attributed it to their titles. As such, the Y changed the branch managers’ titles to be executive directors so that they were held in higher regard and could more easily get into higher-level offices. (I do not know if the YM has called their executive leaders President & CEO all along or if they changed their titles accordingly)

Once they made the change, and some other agencies followed suit, it became very difficult for everyone else to figure out who is an executive director, meaning the executive leader of the organization, or who is the executive director, meaning the senior staff of a branch, unit or facility.

Sometimes I can’t tell either. Once, while I was working with a board to help them select their new executive, I couldn’t figure out if an applicant, who had the title executive director, was actually the executive leader of her organization. I had to ask five different questions to figure it out. (She wasn’t, in case you were wondering.)

So what should you call your executive leader? There are still plenty of executive leaders called executive directors. There are, more than ever, especially in larger organizations, executive leaders that are called President & CEO. Up until recently, I never thought it was that big of a deal. It’s the same job, after all.

What changed my mind? A board I served was considering changing the name of our executive leader when we hosted an event in conjunction with three other agencies. Of the four executive leaders in the room, our executive was the only one with the title executive director. When each of the other leaders was introduced as President & CEO and she was introduced as Executive Director, it became very obvious that we need a title change.

If we as nonprofit leaders want to be taken seriously as the “real” leaders that we are, running “real” corporations, like we do, then we are more likely to be granted that respect when we have the same title, or a better title, as the person to whom we are speaking.

Of course once you change your executive leader’s title to be president you then have to change that the President of the Board’s title to be Chair and the Vice President to be Vice Chair.

They’re the same jobs, but as I’ve said before, any process, or in this case title, that is getting in the way of meeting your goal is a bad process. This one, luckily, is easily rectified, especially if you were revising your by-laws anyway.

A final word on by-laws: It is important that you follow your by-laws. Yet, the funny thing about by-laws is that there is no governing body that will be monitoring if you do. Of course, if you have significant quorum issues, those issues will end up reflected in your audit and any violation of the law is likely to end up in court or the newspaper. For the most part, outside of criminal activity, a civil violation or a hit on your audit, boards are on their own. As such it is important that boards police themselves. The easiest way to do that is to follow your by-laws, review them annually and revise them, as needed, which usually comes out to every 3-5 years.

It’s also critical – and much more difficult – to ensure that you are upholding your governance responsibilities; your executive is appropriately leading your organization, which is meeting its mission, providing excellent service and living its values.

All that starts with the board. And the board starts with its by-laws.

What’s been your experience in agencies following their by-laws? Do you have any funny, or appalling, stories to share? As always, I welcome your insight, feedback and experience. Please offer your ideas or suggestions for blog topics and consider hitting the follow button to enter your email. A rising tide raises all boats.