CIRA believes strongly that good governance is critical to a well-run organization. CIRA takes its governance and Bylaws seriously and has recently had its Bylaw and policies reviewed by Richard Leblanc, one of Canada’s foremost governance experts, who gave them a “A” grade.
CIRA’s governance policies are comprehensive, current, regularly reviewed and revised, and reflect best governance practices.
That said, most people are not familiar with governance and Bylaw best practices. Here’s some helpful definitions and background on CIRA governance.
By-laws, in general, are meant to be flexible and not prescriptive. They provide guidance but provide management with latitude to implement business processes and operational requirements that reflect the best interests of the organization.
An organization’s bylaws are similar to a country’s constitution, they set out guiding principles but don’t regulate the speed limits on your street.
These are the types of typical sections normally within an organization’s by-laws:
- Definitions and Interpretation;
- Election of Directors and Officers;
- Annual and Special Meetings of Members;
- Notice Requirements;
- Membership Categories and Sub-categories;
- Voting of Members;
- Resignation, Termination of Membership for Cause; o Director Meetings and Voting;
- Term Limits and Staggered Terms for Directors;
- Vacancies;
- Quorum and Chair of Meeting;
- Committees of the Board;
- Resignation, Termination, Revocation;
- Conflicts of Interest;
- Officers: Chair, President, Treasurer, Secretary;
- Terms of Employment Contracts;
- Director and Officer Insurance and Indemnification; o Auditor, Cheques, Drafts, Notes;
- Advisors, Agents and Attorneys;
- Execution of Documents;
- Implementation of Transition, Effective Date;
- Adoption, Amendments, Severability, Precedence.
Below are examples of elements that are not appropriate for bylaws:
- are ambiguous and create confusion, with a lack of defined terms;
- intrude upon the prerogative of management;
- intrude upon the prerogative of the Board;
- repeat or address issues that are already addressed, or are at variance with, existing governance policies;
- would adversely affect the interests, privacy and recruitment prospects of an organization’s directors, officers, employees and advisors;
- are best left to the contextual judgment of the Board through established and effective governance policies.
CIRA’s Bylaw is fully documented here.
CIRA’s Bylaw clearly states that changes to the Bylaw are initiated by the Board (section 17.01(a).
One exception, referred to in section 197(1) of the Canada Not-for-profit Corporations Act allows for a change only in the case of a Special Resolution of Members
However, in most cases, it is the Board who makes, amends or repeals any Bylaws that regulate the activities or affairs of the Corporation. The Board would then bring those changes to the membership to consider, review and approve.
The reason for this practice is that the board can conduct research of peer comparables and best practices to ensure a proposed bylaw consistent with best governance and industry practices. It is the responsibility of the Board to consider any Bylaw changes, including those recommended by the membership, to ensure they are in the best interests of the organization.
In short, Directors of an organization are bound by fiduciary duty; members are not.
The Canada Not-for-Profit Corporations Act, section 163, enables a member to propose a Bylaw change. However, changes to the Bylaw, unless they are proposed as a Special Resolution, then must go the Board for review and consideration. The Board then makes a recommendation based on research and consultation; sometimes changes the wording so as to not conflict with other Bylaws, and then tables to motion to the membership for a vote.
The Board is not required to change the Bylaw strictly because it is passed by a member proposal if it is deemed to not be in the best interests of the organization.