Every organization needs clear bylaws. They set foundation for how an organization will run and govern itself. Aside from being a legal requirement for non-profits in most states, they will define who the voting members of the organization are, who the leadership is, and how leaders are appointed and elected.
What seems clear to the people in the room as a new organization forms may not be clear down the road. And that can cause conflict, stress, and legal issues. Bylaws define the legal entity of the organization and help separate the organization, legally, from the individual people in the organization.
Whether you're just starting and drafting bylaws for the first time or reviewing bylaws that have 3" of dust on the binder, the following questions will help you decide what should be in your bylaws. (Disclaimer: Orderly Meetings and this author are not lawyers and are not providing legal advice. But, knowing the answers to these questions will help you be prepared for your meeting with an attorney, and ultimately reduce billable time!)
For the purpose of this document - we focus on "the board of directors." Your organization may use different names and have different Assemblies within the organization that need to be referenced. For example, you may govern by a board of trustees, deacons, vestry, council, team, or assembly. Please use the words that apply in your context!
Final note of best practice: We think brief bylaws are a good thing. Include in the bylaws that which must be in the bylaws. Generally speaking, don't get into the mechanics of policy and procedure. Bylaws should be changed rarely, if ever.
1. Name of the Organization: What is the legal name of the organization as filed with the Secretary of State. Is there a "d/b/a" or "doing business as" name that should also be noted?
2. Objective: What is the objective or purpose of the organization? This should be clear and specific enough to help you not stray from the reason you were formed, while also being flexible to not need to be updated frequently. For a non-profit organization, gifts to the organization are expected to be aligned with its purpose, so this choose your words carefully.
3. Membership: Who are the “members” of the organization. The members may be people who join and pay dues (including those who are served by the organization), or those who are involved in serving and operating the organization. Depending on your state, there may be legal requirements related to having members. For churches, your denomination or tradition may have constitutional requirements regarding what make a congregant a member.
4. Board Members: Note that most state's non-profit law requires a board of directors as well as officers.
a. How many board members should there be?
b. How can that number be changed: (Ex: Bylaws may allow for increasing the seats of the board by vote of 3⁄4 of the current board members.)
c. Recommend - a minimum of 7 board members
d. Consider whether you'll have term limits and if so, whether they are renewable.
5. Officers: Most state's law requires at a minimum, a president and secretary, who are different persons. Consider whether the officers must be nominated and elected by the board of directors, by members of the corporation, or de-facto appointments. You may consider that the bylaws allow for electing officers from amongst future management team members, for example, allowing for an Executive Director to be named President of the corporation. Set term limits and other requirements for the officers.
6. Meetings: Specifically, board meetings. I recommend a minimum of 2, but likely 4 quarterly “board” meetings per year. Some recommendations:
a. The board shall meet for “stated” meetings at least 2x per year.
b. The board may define the stated meetings schedule for the following year at its annual meeting.
c. The annual meeting shall occur in X month
d. The annual meeting may be one of the stated meetings of the year, IF there are more than 2 stated meetings.
e. New board members and officers shall be nominated at the stated meeting prior to the annual meeting and elected at the annual meeting of
the board.
f. A quorum of the board should be met with 50% of the board plus 1 member.
7. Committees and Commissions: Define how committees and commissions are chartered. The board may create committees and commissions as needed, with a 3⁄4 approval of the board.
a. Committees and commissions will be authorized by a Charter of the Board.
8. Conflicts of Interest: We suggest including a high-level conflict of interest policy in the bylaws. Best practice policies should state that:
Conflicts of interest of any board member must be disclosed. If a board member can benefit personally or professionally from a transaction with the organization, they must remove themselves from the discussion and decision and not vote on the matter.
9. Board member indemnification Lean on legal to help define this. Should also address conflicts of interest.
10.Rules of Order Don't write your own. We suggest defining that the current version of Robert’s Rules of Order Newly Revised, shall be the written authority governing the rules of order.
11.Amendments: Define how the bylaws can be amended. EX: "The bylaws may be amended with a 2/3rd vote of the board of directors."
a. If membership is defined beyond the board of directors, define whether the members must vote on amendments to the bylaws.
12.Dissolution of the corporation Need to address how the corporation would be dissolved if necessary. The state and some denominations have some requirements.
13. Other "major" responsibilities: Your bylaws should govern major decision rights - who has the right to make significant transactions, such as purchase and sale of real estate, incurring debt, etc., especially if that decision should not be made by the board.
Here's a download of Sample Bylaws (for a generic PCA Church)
