By-Laws in Brief
By Jan Masaoka
Most of the time, board members don't pay much attention to the legal documents of their organizations. However, when there's a legal challenge to the organization, when there's deep conflict on the board, or when an aggressive or unscrupulous board member tries to take over, everyone scurries to find their copies of the by-laws. Too often, those by-laws were drawn up years ago, haven't been looked at since then, and leave the organization vulnerable.
Nonprofit by-laws are governed by state law, so each state has its own regulations. The website has links to each state charity regulatory office; (the quality of state websites vary considerably).
Here is a checklist to be sure the most important provisions are included in your by-laws:
- Indemnification. A statement that limits the personal liability of board members.
- Whether the organization has members (such as members of a neighborhood or professional association) and if so, what their rights are. In a true membership organization, members have the right to elect officers and other rights. Even if you don't have members with legal rights, you can still have people called "members," but the distinction should be clarified in the by-laws.
- Minimum and maximum number of board members. Example: minimum of 5 and a maximum of 15 board members. Note: Some states specify a minimum, and some specify a formula for a minimum and maximum, so check your state's law.
- The number required for a quorum (how many board members must be present in order for official votes to be taken). Many states specify the minimum required for a quorum; for example, in California a quorum may be as low as one-fifth of the board.
- Terms and term limits. Example: A board term might be two years, with term limits of three consecutive terms (making a total of six years); after a year off, a board member may be permitted to return. Similarly, terms can be "staggered" so that, say, 1/3 of the board is up for reelection each year.
- Titles of officers, how appointed, and terms. Example: By majority vote at a regular meeting of the board; an officer term is for one year with two consecutive officer terms maximum.
- Procedure for removing a board member or officer. Example: By majority vote at a regularly scheduled meeting where the item was placed on the written agenda distributed at least two weeks ahead.
- Conflict of interest policy (See below for links to Board Café articles on this subject).
- Minimum number of board meetings per year. Example: Four, with one in each quarter.
- How a special or emergency board meeting may be called.
- How a committee may be created or dissolved.
- What committees exist, how members are appointed, and powers, if any.
- Conference calls and electronic meetings. Example: Votes by email or webforum are prohibited. Meetings may be held by conference call if all members can simultaneously hear one another.
It's not easy to find sample by-laws that will be applicable to your organization. A theatre will want different by-laws than a medical clinic; and various choices will be better for one circumstance than another.
One place for sample by-laws is: www.mncn.org/info/template_start.htm#Sample%20Bylaws. And some especially developed for community theatres: www.aact.org/start.
Better be safe than sorry . . . review those by-laws this year!
Original publication date: 11/25/2002
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