Guide to 2015 proposed by-law changes

The Canada Not-for-profit Corporations Act contains a massive compendium on issues of governance for non-profit organizations and these include default procedures and processes for anything that may arise. As a result the by-laws of a non-profit do not need to include all potential examples and issues of governance, the Act does that. To assist non-profits in preparing their by-laws, Industry Canada provides sample by-laws and a by-law builder tool to help with the creation of by-laws that are consistent with requirements of the new Act. In the rewriting of our by-laws we used these tools to replace many of the clauses in the old by-laws while retaining their original intent.

In the review of our by-laws there was also considerable detail identified as an explanation on how a by-law would be implemented. This should not be included in the bylaws and is more appropriate in a Policies and Operations Manual. Its inclusion decreases the flexibility of the by-laws. A good example is that the by-laws allow the Board of Directors to create Standing Committees that are assigned vital tasks of the Society. Since these can change they do not need to be individually listed in the by-laws and should appear in the Policies and Operations Manual. Any time the by-laws change, Industry Canada has to be notified. There is no requirement to do so with the Policies and Operations Manual, the content of which still requires approval of the members.

For the most part, STLHE governance and the processes of governance remain the same in the new by-laws, although often reworded. This new set of by-laws does contain some substantive new material that you may want to take a closer look at. This includes:

  • Creation of membership classes
  • Special resolutions and Regular resolutions as required by the new Act
  • Quorum at the Meeting of members (Annual general meeting)
  • Two changes in the Board include removal of ex officio members on the Board and setting a minimum and maximum number of Board members
  • Committees of the Board in particular Standing Committees
  • Creation of Affiliated groups to include Constituencies and Special Interest Groups

The working group that prepared the proposed by-laws that were approved by the STLHE Board of Directors on August 11, 2014 consisted of:

Robert Lapp, President
Denise Stockley, Vice-President
Jon Houseman, Secretary

Section 1. General

Section 1 of both sets of by-laws includes an alphabetically listed set of definitions that makes it easier to understand these terms when they appear later in the by-laws documents. Some of these are required by the Not-for Profits Act: 1.01(a) Act and 1.01(n) Special resolution are examples. Others are to provide a clear definition of terms unique to the by-laws: 1.01(b) Affiliates, 1.01(h) Institutional member and 1.01 (f) Constituencies are examples of this. Others, like 1.01(d) Board are included for clarification. The list doesn’t need to function as a glossary of all terms, many of which have definitions that exist with the Non-profits act. References to different types of individual members have been removed from the general section and the two classes of Membership, Individual and Institutional are defined here. Sub categories of these do not need to appear in by-laws; this will be discussed in more detail in By-laws section 2 Membership. Section 1 General also addresses the operational and legal nuts and bolts of the Society. Our old bylaws often included fixed dates and terms which have been removed to provide flexibility for changes, without directly amending the by-laws each time a change is made. Other changes have been written to be consistent with sample By-laws or the By-law builder tool provided by Industry Canada.

Section 2. Membership – Matters requiring Special Resolution

This new section is required under the new Canada Not-for-profit Corporations Act. Approval of a special resolution requires a two-thirds majority vote to pass, not the usual majority or 50% plus one and applies to anything associated with membership and who qualifies for membership. Our old by-laws included a variety of different membership types that were described as classes, which has a very special meaning in by-laws that wasn’t applied properly. Our old by-laws had three classes of members: Regular, Institutional, and Honorary life members which are a mix of individual and group types. The new by-laws clarify membership as the two classes: Individual and Institutional (group). We can create subclasses within these two groups (Section 2.01) but these do not have to be included in the By-laws.

Our current sub-classes of membership include Institutional membership types: Category 1: Colleges and Primarily Undergraduate Universities, and Category 2: Comprehensive and Medical Doctoral Universities; and Individual Membership types: Regular, Preferred, Retiree, Student, and Honorary life-time. Their differences, including membership dues, become part of the Policies and Operations Manual of the Society. Our old by-laws included a list of criteria in one subsection which has been removed, and all membership classes must meet the objectives of the Corporation which can change without a change in the by-laws.

The remainder of the Section addresses issues of the meeting notices by either the board or by the members themselves. Although at first it may seem confusing that the Meeting of members is not included here and appears in Section 4. this is because the provisions in Section 4 are not subject to the requirement of a special resolution requiring a two-thirds majority vote. It is the same reason that Section 3. Membership, Dues, Termination and Discipline is a separate section outside Section 2. In our old bylaws, many of these items were included in 4. Conditions of Membership.

Section 3. Membership Dues, Termination and Discipline

Like in the old by-laws, dues that are set by the Board but must be ratified at an annual General meeting of the Society. The clarification of the membership classes in the By-laws and sub-classes in Policies and Operations Manual simplifies the language surrounding the assignment of separate membership dues. Rather than be locked into a membership year that requires a by-law change, the annual membership duration is set in accordance with the policies of the Society in 1.01(c) and 2.01 (e). The termination of membership and discipline of members parts of the section are from Sample by-laws provided with Industry Canada and are very similar to parts of section 4 of the old by-laws or deal with discipline of members which did not appear in any concise terms in the old by-laws.

Section 4. Meeting of Members.

This sets out what things MUST happen at the Annual General Meeting of Members as required by the Canada Not-for-profit Corporations Act. It also defines the types of business that is handled at Special meetings of the Members. Traditionally we have combined the two at our Annual General Meeting held during the Annual Conference. Our old by laws set a minimum quorum for a meeting of members as twenty members or 20% of total members; whichever is less. The only time the second part of this would come into play is if the membership of the Society fell below 100, and 20 individuals seemed like a very low number. So in preparing our by-laws we chose a threshold of 5% which, with or current 1000 members would require 50 members to be in attendance or to cast a vote. Business matters are approved by majority vote or in the case of a tie vote, the Chair of the AGM (usually the President) breaks the tie vote.

Section 5. Directors

According to the Canada Not-for-profit Corporations Act, Directors are elected to a four year term by a simple majority vote at the Annual General meeting, and our bylaws require they be members of the Society. Special conditions concerning overlap of positions in the old by-laws become part of the Policies and Procedures of the Society. The new Act does not allow for the ex officio directors that appear in our old by-laws and each must be named, which is why the chairs of the constituencies are termed directors in the new by-laws and these two directors are elected by their respective groups and the Board has no control over that director’s position, renewal, termination etc. The third ex officio member of the board was the Chair of Teaching Learning Canada, and has been removed. TLC indicated to us they no longer wished to be on the Board of STLHE and that instead, the link between the two is through the President of STLHE as Vice-Chair of TLC.
Our old bylaws allow an open ended number of directors and an upper limit of twenty has been established in the new by-laws. When the Board adds a Director, the term expires at the next Annual General Meeting unless the position is permanent, in which case an election would be held at the next Annual General Meeting. Our old by-laws included a number of complex clauses for termination and definitions of vacancy and these have been simplified in the new by-laws using suggestions from sample by-laws and the by-law builder. If a director does step down, the suggested by-laws from Industry Canada state that a majority of the Board members vote to appoint a member of the Society to replace the director for the remainder of the term. This is a way of assuring the board members’ terms of office remain staggered and there is no prolonged empty position on the Board. A vote can be held, but it would have to occur at the next Annual General meeting leaving the position vacant until then.

Section 6. Meetings of Directors

 In this section of the by-laws, most of the old by-laws have been replaced by language from the sample by-laws and by-law builder tool. These are more updated and simpler concerning notice and means of notification. The act includes stipulations for mail-in ballots etc. but they do not need to be repeated here and can be referred to or included in the Policies and Procedures rather than the by-laws themselves, especially since our meetings are either by video conference or face-to-face. A board meeting can be called by the Officers and a seven day notification is required. If less than seven days is given, a majority attending the meeting can still approve the agenda. Quorum at the meeting is a majority of directors (not including vacant positions) and no director can vote as a proxy for an absent director as described in Section 5. The President is the chair of the meeting and does not vote unless there is a tie vote.
The new by-laws have attempted to clarify committees that report to meetings of the directors. We currently have three: the Executive committee of the Officers of STLHE, the Nominations Committee that is activated when an election is required according to Section 5.03, and the Standing Committees whose chairs are Directors. The Executive Committee is defined under 6.07(a) and can act on the Board’s behalf, but the Board must ratify any decisions the committee makes. If they are not ratified, they are reversed. The nominations committee should always be filled, reports to the Secretary, and works prior to the annual meeting to fill vacant positions. Standing Committees are created at the discretion of the board and are assigned vital tasks, and depending on the work involved, the standing Committees may form subcommittees. An example of this is the Awards Standing Committee and the coordinators and subcommittees that handle nominations, adjudication and the various logistics of each award. Our old by-laws listed each of the standing committees and, other than the tasks unique to it, included repetitive clauses on elections, and procedures (Article 16) etc. All references to individual Standing Committees have been removed from the current bylaws. Because they are discretionary and may change, they are better described in the Policies and Procedures of the Society; not locked into the by-laws where changes are difficult to make.

Section 7. Officers

 The Canada Not-for Profit Corporations Act allows for all types of persons to serve as officers: auditor, accountant, legal counsel etc. and these may or may not be members of the Society. This section has the same officers as our old by-laws but attempts to clarify that all officers are directors and directors are members of the Society. The roles of the four officers are described and together they form the Executive Committee which can act with all the powers of the board, but must have these actions approved by the Board. If the Board does not approve, the action is reversed. In essence the role of the officers is to be a quick acting group where immediate decisions are required and also to guide the direction of the Board. This is consistent with the old by-laws. As harsh as the removal terms seem, this is recommended in sample by laws. If the position of a Director of the Board who is an officer is vacated, the Board of Directors appoints someone from the membership for the duration of the position.

Section 8. Notifications

This rather complicated section was missing in our old by-laws but set the rules for due notification for anything other the Meetings of Members and Directors Meetings, and when the Society can assume appropriate notification has been made. A good example would be notices from the Board to constituencies, SIGs, and contract holders. The text in the by-laws is drawn entirely from the sample by-laws and the by-law builder.

Section 9. Affiliated Groups

In the old by-laws, Sections 15 and 17 contained very similar language to describe the governance of the Constituencies and Special Interest groups. The two main differences between the two is that the Chair of a Constituency is a Director and the Chair of a SIG is not. In the new by-laws the two are combined as Affiliates. This simplifies the content of the by-laws and also sends a signal that SIGs may develop into Constituencies – although the circumstances and conditions for this would have to be defined and included in the Policies and Operations Manual when they are.

Section 10. Dispute resolution

This section was missing in our old by-laws and is recommended in the sample by-laws and by-law builder.

Section 11. Effective Date

 Date for the signing of the bylaws and when they come into effect is included in this section of the by-laws.