What are Board Bylaws? | OnBoard Board Management Software | Board Portal

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Every board of directors uses board bylaws to determine how it will operate. Let's look at how they're used, what they include, and how they change over time.

Organizations of all types and sizes need rules that lay the foundation for how they are governed. Board bylaws provide that foundation.

So what is a bylaws document? Bylaws are detailed records that establish the various rules and procedures for how boards conduct business. Among other things, the bylaws set the rules for managing board meetings, specify voting procedures, and establish officer positions and responsibilities.

There is no standard formula for a one-size-fits-all bylaws example or bylaws format. Just as all organizations are different, the board bylaws for various organizations are different. The document should be uniquely crafted to address the specific needs, purpose, and structure of your individual organization. That said, there are commonalities in the basic components of bylaws and how they are used.

Let’s outline the core uses and elements of a board bylaws document.

How Bylaws are Used

Bylaws essentially serve as operating manuals for an organization’s board of directors. They are used to guide directors in their decision-making processes, including how they conduct meetings, manage board business, hold votes, and resolve disputes. The document also defines how board members and officers are elected and the conditions of their service.

While federal tax law doesn’t mandate bylaws for most organizations, many states require nonprofits and companies to establish them, and most banks will request them for organizations seeking loans. Either way, having bylaws is recommended to provide clarity and transparency on an organization’s internal operating rules.

In addition to offering guidance for directors, board bylaws serve as a primary tool for addressing conflicts or disagreements—either internal or external. When a dispute arises regarding whether proper public notice was given prior to a board vote, for example, the board chair or staff attorney would reference the bylaws to prove or disprove the allegations. Well-written bylaws also can help shield organizations from potential problems by clearly defining board procedures, rules, and responsibilities.

The Key Components

Board bylaws should be detailed without being overly restrictive. They should provide a framework for standard operating procedures without placing undue limitations on the board should changes need to be made.

For example, a bylaws document might indicate that board meetings occur the first week of each month, but specifying the day as the first Monday of each month inhibits changing it to another day should the need arise for any number of reasons (i.e., dangerous weather conditions, a power outage, public health emergency, or an inability to reach a quorum). Such a change would require a board vote to revise the bylaws.

Common elements of a board bylaws document include:

Basic organization information, including the organization’s name and primary location address
Statement of purpose that clearly articulates the organization’s mission and purpose
Board structure, including an outline of how the board is organized, a range for the minimum and maximum number of directors, professional versus community representation requirements, and term limits, if applicable
Board officers, including titles (president, vice president, secretary, treasurer, etc.), general responsibilities for each position, and terms
Committee rules, such as how to form new committees, and information on all standing committees, their make-up, and duties
Compensation and indemnification policies outlining how directors, officers, and staff are paid, and to limit directors’ legal liability
Election rules governing how directors and officers are elected or appointed
Process for removing directors or officers, including the vote count needed and causes—such as unethical behaviors, conflicts of interest, poor performance, or other issues
Voting rules specifying procedures for holding a vote and quorum requirements to govern how many board members must be present for a vote to occur
Amending bylaws procedures, such as the required notification, documentation, and majority vote required to revise, add to, or delete a portion of the existing bylaws
Membership rules (if applicable), including eligibility guidelines for membership and member rights
Meeting guidelines outlining how frequently meetings should be held, notification requirements for upcoming meetings, and meeting procedures
Conflict-of-interest policies defining what constitutes a conflict when an individual’s personal interests (financial, familial, or otherwise) could interfere with organizational interests
Dissolution clause outlining the steps for breaking up or closing the organization
Other standard operating procedures, such as fiscal year parameters.

Board Bylaws Are a Living Document

Bylaws are intended to be evergreen documents, but that does not mean they cannot change. In fact, bylaws can and should be updated and amended over time as an organization grows and as its needs evolve. As noted in the previous section, the rules for amending bylaws are outlined in the bylaws themselves.

Board administrators should routinely review the bylaws document at least every two to three years to ensure that the provisions continue to align with the organization’s composition and mission, and remain in compliance with applicable federal, state, and local laws.

Bylaws typically should be drafted when an organization is founded. Because they are legal documents, the board bylaws committee should work in partnership with a staff attorney or other legal professional who’s familiar with bylaws, including federal, state, and local bylaws requirements that pertain to your organization.

Having a robust board management solution can help streamline the process of creating a board’s bylaws, and provide a centralized location for storing and maintaining them.

OnBoard’s Agenda Builder, for example, can be used to help create and update a board bylaws document. OnBoard’s Roles and Terms Management tool also can help boards define the responsibilities and term requirements for individual board members and officers.

Overall, having a comprehensive, current, and well-written board bylaws document is essential to providing clarity and accountability for board directors, officers, and administrators. They provide a legally binding blueprint for how the organization is governed to help ensure board operations run smoothly, efficiently, and effectively.

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About The Author

OnBoard Meetings

At OnBoard, we believe board meetings should be informed, effective, and uncomplicated. That’s why we give boards and leadership teams an elegant solution that simplifies governance. With customers in higher education, nonprofit, health care systems, government, and corporate enterprise business, OnBoard is the leading board management provider.