Unamendable Bylaws Provisions

[Weldon Merritt]

I am reviewing a set of bylaws of a non-profit corporation. The current bylaws have several clauses that include language to the effect that “this provision may not be amended or repealed by any future board of directors.” (This is a board-only organization.) The bylaws also name a specific individual to “serve as a Director of the Foundation and … hold office of President for her lifetime or until she resigns or is medically certified as being unable to serve as a Director.” The “lifetime president” also is given virtual dictatorial powers over a lot of the operation of the corporation.

These provisions seem very wrong to me, but I can’t put my finger on a specific reason that they would be invalid, rather than just a bad idea. I vaguely remember a discussion on this forum some time ago dealing with whether an organization can effectively make a bylaws provision unamendable. But if there was such a discussion, I haven’t been able to find it.

If anyone recalls that discussion, can you please point me to it? Or just give me your thoughts on the validity of “unamendable” bylaws provisions.

[Atul Kapur]

There was this one from Feb 2017  https://robertsrules.forumflash.com/topic/29579-bylaws/

 

 

and it referred to this other discussion

https://robertsrules.forumflash.com/topic/29064-motion-to-never-bring-something-up-again/#comment-167646

 

[Weldon Merritt]

Thanks. Atul. Those discussions are helpfiul.

[Alexis Hunt]

I would think that they likely would fail due to being contrary to the statute creating the corporation, which probably gives the Board authority to enact, amend, and repeal the corporation's bylaws. Unless there was a provision allowing the Board to limit its own power in that way, I don't think it can.

EDIT: I'd also be suspicious of other parts of that provision, such as allowing a non-Director to be President, possibly contradicting the statute; that is the sort of thing that many statutes (rightly or wrongly, not my place to say) disallow.

Edited January 16, 2019 at 04:51 PM by Alexis Hunt

[Drake Savory]

Here's a question: would it make a difference if the un-amendability provision is within the section itself?  I think so.

Example 1)  Section 3:  The Chair shall be addressed as Dominus et Deus; Section 4:   Section 3 shall never ever be repealed or amended.

Solution) Repeal Section 4 then amend/repeal Section 3

 

Example 2)  Section 3 The Chair shall be addressed as Dominus et Deus.   This section shall never ever be repealed or amended.

Solution)  ???

 

[Josh Martin]

6 minutes ago, Drake Savory said:

Here's a question: would it make a difference if the un-amendability provision is within the section itself?  I think so.

Example 1)  Section 3:  The Chair shall be addressed as Dominus et Deus; Section 4:   Section 3 shall never ever be repealed or amended.

Solution) Repeal Section 4 then amend/repeal Section 3

 

Example 2)  Section 3 The Chair shall be addressed as Dominus et Deus.   This section shall never ever be repealed or amended.

Solution)  ???

In my view, the proper interpretation in either case is that the section shall never be repealed or amended (and that there is therefore no solution if the organization later wishes to repeal or amend it), although the latter instance certainly makes this intent more clear. I also advise against adopting such provisions.

[Weldon Merritt]

2 hours ago, Drake Savory said:

Here's a question: would it make a difference if the un-amendability provision is within the section itself?  I think so.

Example 1)  Section 3:  The Chair shall be addressed as Dominus et Deus; Section 4:   Section 3 shall never ever be repealed or amended.

Solution) Repeal Section 4 then amend/repeal Section 3

 

Example 2)  Section 3 The Chair shall be addressed as Dominus et Deus.   This section shall never ever be repealed or amended.

Solution)  ???

 

 

2 hours ago, Josh Martin said:

In my view, the proper interpretation in either case is that the section shall never be repealed or amended (and that there is therefore no solution if the organization later wishes to repeal or amend it), although the latter instance certainly makes this intent more clear. I also advise against adopting such provisions.ss

I agree with Josh on this. When I posted my question I was hoping someone could point me to something saying otherwise, but it seems not. I also advise against adopting such language, but the bylaws I was reviewing already contained it. The Articles of Incorporation, however, specify (without reestriction), "The Board of Directors shall have the power to alter, amend or repeal the bylaws from time to time in force and adopt new bylaws.” I think a strong argument can be made that since the Articles contain no restriction on the board's amendment authority, any restriction of such authority in the bylaws is improper. I have advised the board of that argument, and suggested that they consult with an attorney familiar with the nonprofit corporation statutes of their state on incorporation. (Advice that I susspect they will ignore, as they want to retain the nonamendability provisions.)

[Nathan Zook]

Let's hope not.  Such a provision seems ripe for legal problems.  What happens if president-for-life writes a general power of attorney?  What if that power is challenged?  What if the president-for-life is, heaven forbid, kidnapped and held for ransom?  Just no.

And lets not forget that the ugly provision won't be removable once the president-for-life dies.

BTW, maybe I'm being cynical, but this smells like someone trying to dodge taxes.  I would advise talking asking an attorney specifically about that.

 

Edited February 22, 2019 at 04:05 AM by Nathan Zook
Struck from the minutes speculation about character.

[Weldon Merritt]

18 hours ago, Nathan Zook said:

Let's hope not.  Such a provision seems ripe for legal problems.  What happens if president-for-life writes a general power of attorney?  What if that power is challenged?  What if the president-for-life is, heaven forbid, kidnapped and held for ransom?  Just no.

And lets not forget that the ugly provision won't be removable once the president-for-life dies.

BTW, maybe I'm being cynical, but this smells like someone trying to dodge taxes.  I would advise talking asking an attorney specifically about that.

 

I agree that for numerous reasons, haveing a "president for life" or any unamendable provisions are terrible ideas. Unfortunately, they adopted those provisions well before asking me to review some more recent proposed amendmemts ( none of which were to the objectiionable provisions, which they are quite happy with, for n ow, though I am not).

Actually, I know the "president-for-life," who is the widow of the founder of the organization, whom I also knew well. I don't know the other board members, but I am confident that there was no nefarious intent.  Nevertheless, I hope they will take my advice and check with an attorney familiar with the applicable state laws.

I will note that they at least had the forethought to provide for what happens in the event of the death, inability to serve, or resignation of the lifetime president (which,. of course, means that her tenure is not neccssarilly "for life," despite the title). 

Interestingly, the provisions naming the individual as "president for life" and related provisions are not among those that are designated as "unamendable." I'm not sure if that is because they anticipated the possible need to amend those proviisions, or if they just forgot to include them.

[Nathan Zook]

I'm glad that I was incorrect regarding the intent.