By-laws are significant written rules by which an organization is governed. With minor exceptions, they are largely the same for all organizations since the mission of the organization does not ordinarily affect the structure of the governance document.
Although boards formalize their rules in by-laws, because of their often cumbersome wording and structure, by-laws are frequently neglected and sometimes even ignored. For many reasons, nonprofits should pay careful attention to by-laws. Take the size of a board, for example. An unnecessarily large and unwieldy board of directors can impair an organization’s ability to make decisions and meet new challenges, while an entrenched group of long-time board members might prevent a nonprofit from adapting to change. Bylaws are the tool by which organizations address questions of board membership by specifying board size and term limits. The latter is important to keep your board renewed with fresh members.
During governing controversies, bylaws take on heightened importance. Disputes might involve a member voted out of office who seeks reinstatement, a dissident group within the organization which attempts to gain control of the board, a legal challenge to a board decision, etc. Carefully crafted bylaws and adherence to them can help ensure the fairness of board decisions and provide protection against legal challenges.
Something to Avoid
Think hard before requiring a majority vote of all members to change By-laws because assembling a majority of members is hard for lake associations to do. A majority of those present at Annual Meetings is preferable. Votes may legally be taken by surface or electronic mail, but this eliminates the chance for discussion. The bottom line is to make your binding rules just sufficient, not crippling!
The above discussion is drawn, in part, from The Nonprofit Board’s Guide to Bylaws: Creating a Framework for Effective Governance, by D. Benson Tesdahl. Published by the Board Source, January, 2003.