09-22-2009, 05:53 AM
Joe, welcome to an interesting discussion that has has been dormant since the last annual meeting of members.
The Pennsylvania Nonprofit Corporation Law (PNCL) expressly authorizes the bylaws to vest in the board the power to change the bylaws, subject to exceptions and subject to the power of the members ot change such action. As we discussed at the annual member meeting last year when we amended the Club's Bylaws, the members can always trump any change the Board makes in the Bylaws. In addition, Section 5504(b) of the PNCL lists 20 exceptions where the Board cannot change the Bylaws--mostly related to powers of directors and manner of their election and removal. (I mistakenly told Tom today that the Board could eliminate the Nominating Committee, but that was not correct--only the members could do that.)
The full provision of our Bylaws that you quote in part reads: "The members entitled to vote shall have the power to adopt, amend and repeal the Club’s bylaws. Subject to the PNCL, the bylaws may be adopted, amended and repealed by an affirmative vote of 2/3 of the entire Executive Board." This is a more restrictive provision than that contained in the model bylaws my firm uses when incorporating PA nonprofit corporations--our model provides for amendment of bylaws by a simple majority of the board. I'm curious what the lawyers of the other nonprofits you serve on the boards of were thinking on this topic.
On a practical level, I have observed in the Club what I consider to be a bit of a misunderstanding of the function of bylaws. In my view they set out operating procedures, and ones that we should actually follow. For example, before last year's amendments the bylaws required an annual audit. Perhaps that would be a good thing, but the fact of the matter was that the bylaw requirement had been ignored. As far as the records I inherited as Secretary show, there has never been an audit fo the Club's books. Personally, I think that is not so bad. What the Board authorized this year was an agreed upon procedures analysis of selected issues by an outside accounting firm. We got a good report in relatively short order and at relatively low cost (thanks largely to Graham doing the photocopying himself and Allison doing thorough preparatory work). The Board has also instituted a monthly review of all expenditures by two other Board members, and I think that a cost-effective prophylactic that, had we had it in place last year, would have either forestalled or cought the issues we had. But you all know all about that from the minutes that we started publishing on the web this year.
Sorry I'll miss the discussion tomorrow. I'm glad you're raising these issues so that we can all understand them and reconsider where we are, and where we want to be.
The Pennsylvania Nonprofit Corporation Law (PNCL) expressly authorizes the bylaws to vest in the board the power to change the bylaws, subject to exceptions and subject to the power of the members ot change such action. As we discussed at the annual member meeting last year when we amended the Club's Bylaws, the members can always trump any change the Board makes in the Bylaws. In addition, Section 5504(b) of the PNCL lists 20 exceptions where the Board cannot change the Bylaws--mostly related to powers of directors and manner of their election and removal. (I mistakenly told Tom today that the Board could eliminate the Nominating Committee, but that was not correct--only the members could do that.)
The full provision of our Bylaws that you quote in part reads: "The members entitled to vote shall have the power to adopt, amend and repeal the Club’s bylaws. Subject to the PNCL, the bylaws may be adopted, amended and repealed by an affirmative vote of 2/3 of the entire Executive Board." This is a more restrictive provision than that contained in the model bylaws my firm uses when incorporating PA nonprofit corporations--our model provides for amendment of bylaws by a simple majority of the board. I'm curious what the lawyers of the other nonprofits you serve on the boards of were thinking on this topic.
On a practical level, I have observed in the Club what I consider to be a bit of a misunderstanding of the function of bylaws. In my view they set out operating procedures, and ones that we should actually follow. For example, before last year's amendments the bylaws required an annual audit. Perhaps that would be a good thing, but the fact of the matter was that the bylaw requirement had been ignored. As far as the records I inherited as Secretary show, there has never been an audit fo the Club's books. Personally, I think that is not so bad. What the Board authorized this year was an agreed upon procedures analysis of selected issues by an outside accounting firm. We got a good report in relatively short order and at relatively low cost (thanks largely to Graham doing the photocopying himself and Allison doing thorough preparatory work). The Board has also instituted a monthly review of all expenditures by two other Board members, and I think that a cost-effective prophylactic that, had we had it in place last year, would have either forestalled or cought the issues we had. But you all know all about that from the minutes that we started publishing on the web this year.
Sorry I'll miss the discussion tomorrow. I'm glad you're raising these issues so that we can all understand them and reconsider where we are, and where we want to be.
Chris
981 GT4
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981 GT4
996 GT3 Cup
911 Carrera Sport Coupe
PCA Nationally Trained DE Instructor #200810247
Genesee Valley BMW CCA Instructor