our mantra bylaws = governance policy & procedure = management
TRANSCRIPT
BYLAWSVS
POLICY & PROCEDURE
GOVERNANCE VS MANAGEMENT
OUR MANTRA BYLAWS =
GOVERNANCE POLICY & PROCEDURE
=MANAGEMENT
WHERE’S THE BEEF? BYLAWS
DESCRIBE THE ORGANIZATION DETERMINE TOP LEVEL OF CORPORATE AUTHORITY
(and RESPONSIBILITY) Articles of Incorporation (State Law)
List of all immediately necessary corporate information
Basic outline for constructing Bylaws DEFINE THE GOVERNANCE ROAD
Who are we Why are we in business What is our governance structure
GOVERNANCESTRUCTURE
Board of Directors How many, how elected, terms of office, filling
vacancies Qualifiers and Duties Meeting requirements
Officers Titles, how elected, terms of office, filling vacancies Duties of each Meeting requirements
MEMBERSHIP WHO MAY BE A MEMBER OF THE ORGANIZATION?
Qualifiers Age is usually the only qualifier
More an organizational descriptor than qualifier Member duties
Keep current on your fees Don’t be disruptive
Member privileges Opportunities to attend events Elect Board and (in most cases) Officers Approve Bylaws and amendments (?) Volunteer for roles from ad hoc duties to leadership
THE IMPLIED CONTRACT GOVERNING BODY SAYS TO THE
MEMBERSHIP,
WE WILL PROVIDE YOU WITH A SET OF BENEFITS
MEMBERSHIP (TACITLY) SAYS TO THE GOVERNING BODY
WE WILL TRUST YOU TO OPERATE IN OUR FAVOR
POINTS TO CONSIDER(and Remember)
Bylaws are legally binding documents – know them
Review your Bylaws at least annually Also, when systemic change happens or is desired
Keep Bylaws to high-level matters Watch out for creep into Procedure
Keep your Bylaws current, however, be alert for changes that may restrict future Boards
BOARD COMMITTEES Committees are the management arm of the Board
Manage the operations of the organization’s intent Board’s information conduit to and from the membership Seek and enable volunteers
At a minimum, consider Nominating Committee Finance Committee Curriculum Committee (production) Allow for ad hoc committees
COMMITTEES GIVE THE BOARD THE INFORMATION AND TOOLS WITH WHICH TO MAKE GOVERNANCE DECISIONS
THAT’S THE REVIEW OF THE BYLAWS BASICS
BYLAWS = GOVERNANCE IDENTIFY THE ORGANIZATION DEFINE ITS PURPOSE AND STRUCTURE CREATE AVENUES FOR COMPLETION OF
ORGANIZATIONAL PURPOSE
Bylaws define, construct, and enable governance to get the organization’s job done.
POLICY & PROCEDURE Board sets Policy, thereby helps
define Procedure SO – NOW WE HAVE THREE TOOLS
BYLAWS POLICY PROCEDURE
POLICY
POLICY SETS THE FRAMEWORK FOR OPERATIONS
GOVERNANCE LEVEL i.e. BOARD MEMBERS SHALL NOT PORFIT FROM THE
ORGANIZATION’S BUSINESS TRANSACTIONS OR FROM INFORMATION OBTAINED DURING THE CONDUCT OF ORGANIZATION BUSINESS.
OPERATIONAL LEVEL i.e. “PRESENTERS MAY NOT, DURING THEIR
PRESENTATIONS, PROMOTE OR SELL PRODUCTS OR SERVICES FROM WHICH THEY BENEFIT”
POLICY GUIDELINES Mission oriented
Defines operational inclusions and limits for mission completion
Purposeful Written with a definite purpose in mind, and in plain
language
Flexible Change happens everywhere
Well communicated All stakeholders, all stakeholders, need access to
Policy
IRS FORM 990 The “information return” required of tax exempt
organizations
Tax Exempt/Government Entities Commissioner (TE/GE) Head of the IRS division responsible for nonprofit
oversight
The 990 has become a very complex document and is still very much a work in progress
Lists policies “suggested” for nonprofits, which do nicely as a policy checklist for service organizations
MINIMUM GOOD PRACTICE POLICIES
A Mission Statement
A Conflict of Interest Policy
Code of Ethics
Meetings documentation and document retention policy
An expense reimbursement policy
Gift acceptance policy
A fundraising policy
An investment policy
MORE on GOOD PRACTICE POLICIES
Which Policies do you need A Whistleblower Policy – International grant-making policy – Debt collection – likely no Executive compensation policy
MORE POLICIES FROM IRS FORM 990
Or how about: Joint venture policy Affiliate policy Conservation easements policy
The 990 speaks to many more… Use it as a guide
References for information besides IRS publications The Panel on the Nonprofit Sector Evangelical Council for Financial Accountability (ECFA)
PROCEDURE General, or maybe in depth, ways to to do what the
Bylaws and Policy want done. Purely operational Task specific
Serve at least two ways: Offer ways to accomplish given tasks Serve to offer continuity for new members and
leadership
Must be fluid so as to accommodate better ways Allow changes at operational level – no Board action
needed
POLICY vs PROCEDURE Policy defines the framework for operational activity
Procedure serves to offer Policy-guided ways to actually do the tasks that the organization wants done
Policy – The organization shall seek supplementary funding through appropriate fund development activities.
Procedure – Contributors to the Annual Fund will use the prescribed form.
Policy – Board and committee volunteers will not have to pay for parking in pursuit of their duties.
Procedure – Parking tags will be supplied to volunteers for parking at our main building.
BYLAWS vs POLICY We have discussed that Bylaws define the structure
and set the tasks for Governance
And, Policy describes the framework for managing operations
And, Policies may be general or more detailed, depending on the task
How about some examples of Bylaws-to-Policy-to-Procedure
BYLAWS vs POLICY (cont.)
A Bylaws provision at its minimum
OLLI@UGA Standing Committees Bylaws list only the essentials
The President appoints the chairs, with Board approval Certain documents are named for guidance Committee names are listed
Everything else is found in committee Policy, and in Procedure
BYLAWS vs POLICY (cont.)
Here’s a Bylaws article moving well into procedure
OLLI@UGA wanted increased transparency in the officer/director nominating process
Nominating Committee Bylaws article doubled in size Article split into two sections
1) Nominating Committee nomination and election 2) Nominating Committee general procedures
Duties, time lines, report inclusions The Process description is complete in concept
BYLAWS = GOVERNANCE
Bylaws constitute the prime document that describes and enables the organization The highest level of organizational documents Contain all the elements of governance structure A legal document, and an implied contract
Bylaws should not speak to operational matters, either in process or in procedure
Bylaws should offer to the entire organization freedom and opportunity to carry out the mission in the most efficient and effective manner
POLICY & PROCEDURE = MANAGEMENT
Policy serves the Bylaws by setting the framework for accomplishing the organizational mission Policy can open up the mission
We will accept for membership any one who wants to share in our mission
Policy can define limits Presenters shall not sell their wares during class
Procedure describes, in greater or lesser detail, the operational process for task accomplishment Purely operational, and specific to the task
SO, HERE’S THE BEEF Our Bylaws tell the world, and particularly our
members, Who we are and what we intend to do, and How our governance process is established and
organized in order to oversee accomplishment of our mission.
Policy & Procedure define the ways and means
AND, Governance and Management inform each other at
many points along the way, and either can be changed by the necessities of the
other.
Governance and Management must be a
continuous loop
In reality the equation is Governance & Management
= Success
Thank you, and Good Luck