What are nonprofit bylaws?
They define essential elements including board size, officer and directors’ roles, basic rules, policies and procedures and other matters of corporate governance.
Although bylaws are not public documents, sharing them openly increases your accountability and transparency in decision making. Your board should review and amend bylaws regularly as the organization grows and evolves.
Jan Masaoka writes in “The best of the board café” that there are a number of important points to include in your organization’s bylaws:
- Indemnification. This is a statement that limits the personal liability of board members.
- If the organization has members, what rights they have. For example, do members have the right to vote and elect officers?
- Minimum and maximum number of board members. Be sure to check your state’s law governing non-profits, as some states specify a minimum, or even a formula for a minimum and maximum number.
- The number of board members required for a quorum, or the minimum number who must be present for official decisions to be made.
- Terms and term limits. For example, may serve a term of two years, with a limit of three consecutive terms (for total of six years. Following one year off, a board member may be permitted to return. Terms can also be staggered so that part of the board is up for reelection each year.)
- Officer titles, how they are appointed and their terms. For example, appointed by majority vote at a regular meeting of the board; an officer term is for one year with a maximum of two consecutive officer terms.
- Procedure for removing a board member or officer. For example, by majority vote at a regularly scheduled meeting where the item was placed on the written agenda and distributed at least two weeks ahead.
- Conflict of interest policy; when and how to declare a conflict of interest as related to the organization.
- The minimum number of board meetings to be held each year.
- How a special or emergency board meeting may be called.
- How a committee may be created or dissolved. Specific standing and ad hoc committees should not be listed, due to need to amend the bylaws each time a committee is created or changed.
- Procedures to schedule conference calls and electronic meetings, or if they are allowed at all.
- Procedures to change or amend the bylaws. Typically, bylaws are allowed to be amended only by majority vote at the annual board meeting, following publication of proposed changes to all voting members.
In addition, bylaws may also include:
- The procedure for resigning from the board or from an office.
- Notice that failure to fulfill minimum board obligations may be accepted by the board as an actual or implied resignation.
Michigan State University Extension recommends that bylaws be reviewed every few years. Too often the board looks to the bylaws to see how to deal with a particular situation, only to discover that the bylaws were written many years ago (and seldom looked at since) and do not address the matter.
Always put the date of latest revision at the end of the by-laws document. When another revision is made do not remove the prior date, add the new one so you end up with: “7/04; 11/08; 3/10.”
Accurate and updated bylaws will help your organization to run more smoothly.