Modified: October 2012
What is a professional practice statement?
This Professional Practice Statement, developed by the Association Forum, is provided as a management tool for associations and individual association professionals, developed by experts in the industry, and recommended as a means to achieve excellence in managing associations and other not-for-profit organizations.
This professional practice statement is intended to help nonprofit governing bodies and association professionals understand the framework within which bylaws should be developed and amended. The primary focus is on membership organizations (professional societies, trade groups and the like).
Simply put, bylaws are the fundamental rules by which an organization governs itself. Bylaws can be considered the organization’s contract with its members. They state, interpret or implement the general governance policies of the organization. They determine:
- The structure of the organization,
- The rights of the participants in the structure, and
- The framework within which those rights are exercised.
Bylaws should reflect the culture, mission and strategic direction of the organization. They should strike the appropriate balance between flexibility and specificity. They should be flexible enough to allow the association to achieve its mission without frequent amendment, but specific enough to provide structure and direction to the board and members for achieving the mission. Bylaws must be aligned with the organization’s articles of incorporation and compliant with the law of the state in which the organization is incorporated.
Bylaws are distinct from other governing documents. The hierarchy of governing documents is described below:
Articles of Incorporation: An organization’s articles of incorporation can be thought of as the organization’s contract with the state. The information included should reflect the minimum required by state law. The articles generally identify the organization’s name, legal purpose and the disposition of its assets upon dissolution.
Bylaws: The bylaws will necessarily be more specific than the articles, but may not violate what is outlined in the articles of incorporation or conflict with the law of the state of incorporation. Bylaws should not overly restrict the organization’s operations. Moreover, the association’s practices must match its bylaws. If they do not, either the bylaws or the organization’s practices must be amended to be consistent with each other.
Policies and Procedures: Further levels of specificity should be contained in a policy and procedure manual detailing the rules governing the association’s operations. Membership processes, administrative rules, financial policies, parliamentary procedures and the like generally should be outlined in policies rather than incorporated in the bylaws.
Professional Practices for the Governing Body and the Association Professional
- Be tailored to the specific needs and expectations of the organization.
- Be easy to understand and reasonable to implement.
- Be clearly and concisely written and avoid unnecessary legal “jargon.”
- Describe, in general, the rights and duties of the organization’s members, addressing such issues as criteria and application for membership ; voting rights; references to codes of ethics governing members; meeting notice; a quorum provision that complies with state law and is practical for the organization; and the substantive circumstances and procedural due process governing termination of membership.
- Provide basic rules for the composition and responsibilities of the board of directors and officers, including the number of board members and officers; qualifications and method for election, removal and filling vacancies; terms; meeting requirements (notice, quorum, voting, telephone or electronic).
- Consider and define the nature and relationship of affiliated organizations (chapters, foundations, etc.), if any.
- Identify and define standing committees of the board, to the extent such committees are deemed necessary.
- Establish the method of creating other board committees and provide for the creation of advisory and ad hoc committees and task forces as necessary (with rules governing such groups detailed in policies).
- Set procedure for the manner in which the bylaws may be amended. Include other provisions such as waiver of notice, indemnification and dissolution.
Developing and Amending Bylaws
The board of directors and key staff should be the primary driver in developing and amending the association’s bylaws. A standing bylaw committee is not necessary or desirable, as it may encourage too frequent or unnecessary changes to the bylaws. If properly constructed, frequent amendments will not be necessary.
Nevertheless, bylaws should be reviewed regularly to ensure that they are in compliance with state law and the articles of incorporation, and reflect the association’s actual practices. Should the organization determine that amendments are warranted, it should:
Model bylaws can be helpful as a resource for developing and amending bylaws. However, organizations should not simply adopt model bylaws but should look critically at such samples and tailor them to meet their specific needs and objectives.
Under the laws of some states, including Illinois, the board of directors has the power to amend the bylaws of the organization unless otherwise provided in the articles of incorporation or the bylaws. While the recent trend is for directors to amend bylaws, depending on the background and culture of the association (e.g., trade association, professional society), there may be different views as to who should amend the bylaws. If member approval is required for amendment, board approval also should be required.
- Ensure that the process is forward-looking, so that changes or amendments are not unnecessarily restrictive on future activities.
- Ensure that the bylaws support and advance the organization’s ability to achieve its mission and respond effectively to its environment.
- Review the bylaws in a comprehensive manner so that any changes to the bylaws are consistent with all sections of the document and with other governance documents. In some cases, particularly when multiple amendments or complex revisions to the bylaws are being considered, it may be appropriate to rewrite the bylaws in their entirety.
- Ensure that related bylaw amendments are considered and voted on together.
- Seek technical and expert assistance, including legal counsel, to ensure the document is in compliance with legal requirements.
The association community has identified a number of trends that may have an impact on an organization’s bylaws and may warrant an organization reviewing its bylaws and policies.
Parliamentary Rules: Many bylaws include provisions specifying rules related to parliamentary procedure. State law does not require bylaws to have these provisions and many organizations do not conduct meetings in strict compliance with such procedures. As a result, nonprofit organizations are eliminating these provisions from their bylaws, referencing more flexible parliamentary rules or limiting parliamentary rules to specific governance meetings (such as an annual meeting of association members).
Use of Electronic Communication: Bylaws are becoming more technology neutral, allowing the organization to more easily adopt new means for conducting business without the need to amend the bylaws. But the pervasive use of electronic communication (email, electronic meetings, listservs, etc.) to conduct association business may require organizations to review their bylaws and state law provisions governing meetings, notice and voting to ensure that such exchanges are allowed. Some states, such as Illinois, have adopted laws to allow for electronic voting and notice. In states where electronic meetings are allowed, it is important to determine all the elements of conducting such a meeting electronically (notice, verification of identity, allowable means of communication).
Superfluous Governance Documents: Many associations are limiting their governance documents to articles of incorporation, bylaws and policies, incorporating elements of other redundant or superfluous governance documents where appropriate. Constitutions, standing rules and other such documents are being eliminated.
The Association Forum expressly disclaims any warranties or guarantees, expressed or implied, and shall not be liable for damages of any kind, in connection with the material, information, or procedures set forth in these Statements or for reliance on the contents of the Statements. In issuing these Statements, the Association Forum is not engaged in rendering legal, accounting or other professional services. If such services are required, the services of a competent professional should be sought.
The handbook of nonprofit governance (2010). Washington, DC: BoardSource.
Mandel, J. (2006) Law Review: to Meet or not to Meet. Chicago, IL: FORUM magazine
Mandel, J. (2010) Chicago Law Partners In Brief, Issue No. 1.
Robert, H., Honemann, D., and Balch, T (2011). Roberts rules of order, newly revised, 11th edition. Philadelphia: DaCapo Press.
Rominiecki, J. (2012), Governance: Beware these bylaws mistakes, Associations Now, the Volunteer Leadership Issue, 15.
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Stephens, J. (2000). Bylaws: Writing, amending, revising. Clearwater, FL: Frederick Publishers.
Tesdahl, D. (2010). Better bylaws: Creating effective rules for your nonprofit board, 2nd edition. Washington, DC: BoardSource.
Type: Professional Practice Statement