Board Member Term Limits are being Circumvented by Becoming Officers

[Guest FDD]

I am a member of a nonprofit organization’s board of directors.  The organization has scheduled elections for directors and officers next month at a regular board meeting.  I have concerns regarding term limits of directors and the inconsistent provisions in the bylaws, specifically, whether directors have been and will be re-elected in violation of the two-term limit.

For decades, certain individuals have remained on the board of directors by serving as directors with tenure limited to two terms.  After their two terms are complete, these individuals have been elected as officers.  (Upon election or appointment officers become members of the board.)  As a result, these individuals remain as long term directors.  Is this proper?

Below are excerpts from the bylaws:

"ARTICLE III

Board of Directors…

Section 3.  Term of Office.  A board member shall hold office for the term elected and/or until a successor is elected and qualified, or until the board member resigns or is removed.  The initial board shall be appointed by the incorporating steering committee for staggered terms of one and two years.  Subsequent board members shall be elected at the annual meeting of the corporation for two-year terms.  A board members tenure is limited two terms [emphasis added]. A board member may serve subsequent terms following a year absence...

ARTICLE VI

Officers

Section 1.   Number and Election.  The officers of the corporation shall consist of a president, secretary, treasurer, chairperson of the board, one or more (not to exceed four) vice-chairpersons, the board shall elect or appoint the officers. Upon election or appointment officers become members of the board [emphasis added].

Two or more offices may be held by the same person, but an officer shall not execute, acknowledge, or verify an instrument in more than one capacity if the instrument is required by law or the articles or bylaws to be executed, acknowledged, or verified by two or more officers.

Section 2.   Term of Office.  With the exception of the president an officer elected or appointed, as herein provided, shall hold office for the term elected or appointed and until a successor is elected or appointed and qualified, or until that officer resigns or is removed.  Initial officers shall be appointed by the incorporating steering committee for predetermined terms.  Subsequent terms are for two years. Terms of office are not limited by board terms [emphasis added]."

Thank you.

 

[Atul Kapur]

28 minutes ago, Guest FDD said:

Terms of office are not limited by board terms 

Interpretation of bylaws is something for the organization itself to do. However, this last sentence seems to make clear that the two term limit for board members it's not meant to apply to officers.

 

Is your current practice proper? That's a matter of opinion.  Is it compliant with the bylaws?  I would say yes.

[Guest FDD]

Excellent.  Thank you for your most timely assistance. 

[Transpower]

I would also say that your current practice is consistent with your bylaws....