Bylaws changes can be big or small, but either way member input is critical for success
March 1, 2019
By Walt Williams
Bylaws are the DNA of every association, spelling out how each is structured, but different groups have different strategies about how to tinker with their foundational documents.
One of the most recent groups to take an ax to its bylaws is the International Dairy Foods Association, which announced in January it was folding three constituent organizations into the main association. That meant creating a single set of bylaws that covered the new, broader organization, CEO Michael Dykes said.
“They had different bylaws,” he said. “There were different bylaws in different states. … They weren’t the same and they weren’t filed under the same legal jurisdictions.”
Many associations have processes in place for amending their bylaws and do so regularly. Others have gone decades without touching theirs. Either way, people who have been through the process say that to be successful, you need to give members a way to provide meaningful input concerning proposed changes. Also, you should bring in a lawyer early on.
Seek member input
Dykes said he initiated the process of IDFA’s reorganization not long after he joined the association in 2017. The goal was to bring all dairy products under a single brand as having three separate constituent organizations—representing milk, cheese and ice cream—was confusing not only to the public, but to the members themselves.
“I had members tell me ‘Michael, I don’t fit there on the current structure. I’m on the milk board, but I don’t bottle or sell fluid milk,’” Dykes said.
So Dykes began working with the four boards and legal counsel on a new organizational structure to bring the groups together but still give individual dairy sectors their own voice. The solution was to create five “industry segment boards” representing producers of dairy products like fluid milk, cheese and yogurt, with more boards possibly to be created in the future. These boards do not have separate bylaws but still help set priorities and direction for the entire association.
IDFA’s previous bylaws were dumped in the process and a new set was created to provide the framework for its new structure. They were drafted over roughly a year with input gathered from board meetings, individual meetings with members, webinars and meetings with outside counsel.
“Outside counsel guided us on what we needed and what questions we needed to answer, and we worked with the board to come up with answers we thought suited us,” Dykes said.
The American Dental Association was also seeking efficiency when it adopted a new constitution and bylaws in 2016. The Chicago-based group hadn’t touched its bylaws since the 1940s, and at 90-plus pages, “this made the document very inefficient,” an ADA spokesman said. (ADA responded to CEO Update requests to comment through email.)
“Also, because amending the bylaws requires a two-thirds majority vote to amend, even the most elemental revision, such as deleting an outdated provision, required a supermajority vote of approval” of the 483-member House of Delegates, the spokesman said.
The job of rewriting ADA’s bylaws was given to its Council on Ethics, Bylaws and Judicial Affairs, which formed a task force composed of former board members, the speaker of the House of Delegates and members with parliamentary experience in the organization. Once the task force had a working draft, it was given to the council to ratify and was then presented to the full House with a side-by-side comparison to the old bylaws.
“In addition to the comparison of the then-current bylaws and the proposed amendments, (the bylaws council) commissioned the creation of a survey tool that allowed comments and suggestions to the proposed amendments by reviewers to be submitted,” according to ADA.
“A great number of comments and suggestions were provided using this tool. Each comment and suggestion was compiled into a master document and then each comment was reviewed and responded to by the bylaws workgroup. This document was also distributed as noted above together with a revised and final set of proposed bylaws amendments.”
The new bylaws clocked in at 32 pages and have so far worked out for ADA. A few revisions were made in 2018 to “fine tune” the document, but the group has received no major complaints so far.
Keep it legal
Mark Dorsey, CEO of the Construction Specifications Institute, has been through “more bylaws changes than I can remember,” all the way from his involvement in college student government to his current job at CSI. The big problem, as he sees it, is too many bylaws are “overworked and overly complicated.”
“Most bylaws contain provisions that are really more policies of a board or things that can be delegated to a working group, whether that’s a committee or staff,” he said.
As a result, the first question associations should answer before amending their bylaws is whether they need to do it at all, Dorsey said.
“If you go through regular bylaws reviews every few years—which you should—(the bylaws) should change relatively infrequently if the bylaws are focused on their core components: size and composition of the board, how it will function, how people get elected, rights of members, those sorts of things,” he said.
Any bylaws revisions should be a volunteer-led process that takes advantage of staff competencies as well as outside counsel, Dorsey stressed. The latter is critical because laws governing bylaws can vary greatly from state to state. The CEO noted that Maryland, for example, doesn’t have a separate nonprofit statute while its neighbor Virginia does.
Bylaws are, of course, legal documents, which is one reason why attorney George Constantine of the law firm Venable suggests bringing in counsel very early in the bylaws revision process.
“Very often what you’ll see is an association will go through a bylaws review through some sort of a task force or committee and say, ‘Take a look. Let us know how you want to change it,’” he said. “And they may get pretty far down the line of recommending changes that ultimately are contrary to the articles of incorporation of the organization.”
Constantine joked that while it may sound self-serving for a lawyer to recommend getting a lawyer early on, it can save associations headaches by preventing volunteers from putting a lot of work into something only to be told their input runs contrary to the articles of incorporation or afoul of state laws.
Constantine also recommended regular reviews of existing bylaws. It isn’t uncommon for associations to evolve while their foundation documents remain frozen, with groups over time adopting practices that may not be in line with what is explicitly spelled out in bylaws. For example, he pointed to the recent trend of professional societies updating the code of ethics for members in response to broader concerns about sexual harassment and other misconduct.
“Removing a member or disciplining a member a lot of times may be too inflexible or too difficult to manage on a practical basis,” he said. “So it’s important to know that if you’ve gone down the path of a particular activity, you’ve got the blessing of the bylaws to do so, and if not, this is a great time to perfect that and clean that up.”