Nonprofit board consultant Terrie Temkin (CoreStrategies for Nonprofits Inc.; TerrieTemkin@CoreStrategies4Nonprofits.com) is adamant on one thing when it comes to the organization’s bylaws: “Do not use off-the-shelf bylaws,” she said.
When the organization simply copies its bylaws from a book or another source, it can create serious problems for itself, Temkin said. The creation or revision of bylaws requires time and effort to make them fit your organization, she said.
The quorum is one area in which Temkin suggests problems occur over and over in nonprofits with off-the-shelf bylaws. That’s because too many organizations set the quorum at 51 percent. But that’s not a legal requirement or a definition, she said.
Here’s the problem with that, according to Temkin: Let’s say the average board size is 15 members. If the 51 percent quorum figure is used, that would be eight board members required to meet it. Most organizations use a majority vote, which makes the majority in this example five board members who are making a decision for the organization. So it is possible that the organization has only five board members, or one-third of the board, making very important decisions.
“Those are the people at the board meeting, so they rule the organization,” Temkin said. On smaller boards, you might have only three board members making the decisions for the organization.
“In my mind, that can be dangerous,” she said.
If the decisions are made only by the majority of those board members in attendance, that’s not a true majority decision, Temkin said.
Temkin suggests organizations use a range rather than a specific number when dictating the required number of directors who will serve on the board. “For example, 9 to 12, instead of 11,” she said. “If you have a specific number, you either have to put a warm body on the board to satisfy your bylaws if you can’t find the ‘right’ person or you may have to forego a fabulous person the organization has recently become aware of if there are no open slots.”
By using a range, however, the organization achieves flexibility, particularly if it doesn’t regularly recruit to fill all the slots, she said.
“What I see with bylaws is that organizations put themselves in a position where they are not acting on behalf of the nonprofit because the bylaws were not well thought out for that particular organization,” she said.
Creation of bylaws requires thought up front to craft them so they suit the needs of the organization, Temkin said. “You have to look at where governance is today, research and look at each section of the bylaws,” she said. The question needs to be asked: Are we writing this bylaw out of habit, or do we have a good reason for the language?
To create a good set of bylaws that will fit your organization’s needs, here’s what Temkin recommends:
A bylaws committee needs to meet, do the research to find out what is common today and ask if these bylaws as currently written are right for the organization. It should be a bottom-line decision, Temkin said, about whether the bylaw helps or harms the nonprofit.
The amount of detail required to do this properly requires a committee’s attention to dig down deep. For example, are you referencing your records retention policy in the bylaws? Temkin said the board’s policy on records retention is now required by law.
“I reviewed a great policy on records retention and had never seen one with such terrific detail,” she said. “As good as it was, it was outdated. We are in the digital age now, so you need to address storage of records digitally. I don’t see organizations looking at their bylaws in this way.”
Bylaws work is work that belongs to the board, Temkin said. “I believe this is a board job,” she said.
It can be a good idea to bring on a bylaws expert to the board committee, or community governance experts, or have a couple of board members who love bylaws on the committee, she said. “You don’t need to get a lawyer to do this work, unless that lawyer deals with nonprofit bylaws specifically,” Temkin said.
CEOs need to rely on their boards to take more responsibility than they do, Temkin said. The bylaws assignment is a perfect example of board members acquiring more knowledge about board work and becoming stronger, more-informed directors because of it, she said.
There are some areas where the CEO should have a role with board bylaws work, according to Temkin. “[She] can sit in on committee meetings and discuss some of the issues that she sees as working well along with what doesn’t work well and why,” she said.
The CEO can also report on what she hears from her colleagues, issues they have faced with their organization’s bylaws and how they dealt with them.
Right before the bylaws are presented to the board for approval, the executive director should look at them as an editor would. “She can point out what isn’t clear or what might be misinterpreted,” Temkin said.
The CEO’s role is to help guide the committee, but not to dictate.
Bylaws review, once the bylaws are written, should be placed on the board’s governance agenda. “Too often, neither the board nor the executive director really knows what they contain and they are not reviewed all that often,” Temkin said.
Try to review the bylaws every three years, because they do need to be reviewed conscientiously to support maximum board effectiveness, Temkin said.
For more information, go to http://www.corestrategies4nonprofits.com.