A not-for-profit’s bylaws guide its activities, outlining how it must be governed. They are not meant to provide a blow-by-blow policy and procedures manual, dictating how to execute on every turn an organization may take.
Allowing for agility and innovation within an organization means ceding strict governance control, at least in good part, to those managing operations. This standing down from a micromanagement role also applies to reviewing and changing draconian and outdated bylaws, often put in place at the founding of the organization in an earlier decade or even century. Modifying bylaws can go a long way to opening doors to new strategies. In late 2013, the American Academy of Dermatology hosted a State Society Leadership Summit, at which a State Society Development Task Force was formed. Several topics emerged as priorities, including, among other things, ineffective committees, outdated bylaws or structures, and the lack of support for organizational change.
Interference from a board can also hinder innovation, especially if financial reasons are cited as the rationale for limiting investment, even if a reserve exists. Today’s environment demands financial risk-taking, and while that mindset goes against the grain of societies with an anti-profit mindset, it remains an imperative when seeking growth and replenishment of funds. Carefully planned strategies can result in new offerings that stimulate growth, market awareness, and raise the profile of an organization. While startups and commercial publishers experiment in the marketplace, society boards must understand that in order to fulfill missions, commercial competitiveness remains an imperative, even while maintaining a mission-driven culture.
Some issues to consider when modifying bylaws include:
- Are the organization’s principal mission, core values, and objectives up to date? Including language about innovation in the objectives section, for example, can keep that goal at the forefront. For example, “To serve as a highly trustworthy, innovative, collaborative organization bringing together and involving…” is a good way to begin stating an objective.
- Do the bylaws measure effectiveness? Provisions for metrics may provide helpful and consistent guidelines for considering new actions.
- Do the bylaws define the qualifications or functions of board members? What mix of expertise, personality, or strength should they exhibit? This can help ensure that a board’s composition supports innovation and looking outward rather than focusing inward or on personal causes.
- Size of the board and frequency of meetings can be key to an organization’s success, and better set in bylaws than in board resolutions that tend to become buried in minutes and forgotten (or ignored). Boards with more than 10 members become difficult to convene and manage, and small boards (fewer than six) may discourage independent thinking and effective leadership.
- Do the bylaws contain a conflict of interest policy, and how direct or perceived conflicts must be addressed? Many organizations require its directors, officers, and key employees to sign conflict of interest letters each year, along with statements disclosing all actual and potential conflicts.
- Do the bylaws define what and how committees may be established, who can serve on them, accountability to the board, and do they establish powers and limits? Metrics around committees and their assigned tasks are critical in ensuring that ineffective committees do not have the ability to interfere with constructive actions a board or employees may wish to take.
These are only a few of the many considerations not-for-profits need to take into account when creating or modifying bylaws, ensuring that governance policies do not restrict innovation and progress. Societies today are struggling with attracting, serving, and building membership bases. Being stymied by restrictive governance provisions will only stifle innovation and creative thinking by the board, employees, and members.
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