If officers are not directors unless stated in the Bylaws, then how best to state so?

[Nic Rosenau]

We are in the process of revising our Bylaws, and in my research, I came across this article by Gene Takagi on the Nonprofit Law Blog: “Nonprofit Directors and Officers – Not the Same Thing” where he says:

Quote

When an individual holds both the position of director (i.e., board member) and an officer position (e.g., chair of the board), we often see such individual elected for only the officer position. It is then assumed that such person automatically also becomes a director, but that’s only the case if the governing documents of the nonprofit provide that the officer is an ex officio director. … For many nonprofit corporations, the officers are also all directors. And sometimes, these individual are only elected as officers and wrongly assumed to have been also elected as directors. As a result, if the presumed directors are not duly elected directors (and not ex officio directors), corporate actions thought to have been adopted by the board may not have been duly adopted. This problem could result in material misrepresentations and breaches of contract.

So, I want to be sure that our Bylaws do say that: 

ARTICLE #: OFFICERS. Section #. Officers and Duties. The officers of the Society shall be a President, a Vice President, a Secretary, a Treasurer, and [up to] [eight] directors. … 

ARTICLE #: EXECUTIVE BOARD. Section #. Board Composition. The officers of the Society, including the directors, shall constitute the Executive Board.

(the “and [up to] [eight] directors” part is under discussion and may be revised to simply "and X directors" with the value of X still to be determined. 

I think that covers it, but I wonder if we need to say something more explicit such as a sentence along the lines of, "All officers are ex officio directors." 

Thank you in advance for your help. I greatly value everything I have learned from this forum and appreciate how thoughtful, thorough, and clear everyone has been.  

[Richard Brown]

On 6/12/2024 at 12:37 PM, Nic Rosenau said:

We are in the process of revising our Bylaws, and in my research, I came across this article by Gene Takagi on the Nonprofit Law Blog: “Nonprofit Directors and Officers – Not the Same Thing” where he says:

So, I want to be sure that our Bylaws do say that: 

ARTICLE #: OFFICERS. Section #. Officers and Duties. The officers of the Society shall be a President, a Vice President, a Secretary, a Treasurer, and [up to] [eight] directors. … 

ARTICLE #: EXECUTIVE BOARD. Section #. Board Composition. The officers of the Society, including the directors, shall constitute the Executive Board.

(the “and [up to] [eight] directors” part is under discussion and may be revised to simply "and X directors" with the value of X still to be determined. 

I think that covers it, but I wonder if we need to say something more explicit such as a sentence along the lines of, "All officers are ex officio directors." 

Thank you in advance for your help. I greatly value everything I have learned from this forum and appreciate how thoughtful, thorough, and clear everyone has been.  

If you use the language you suggested (or which you currently have) which says that "The officers of the Society, including the directors, shall constitute the Executive Board", there is no need to state again that officers are also directors ex-officio.  However, there is no harm in saying so using the language you suggested.  That would remove any doubt as to whether the officers are also directors.

Edited June 12, 2024 at 06:12 PM by Richard Brown
Added last sentence

[Gary Novosielski]

On 6/12/2024 at 1:37 PM, Nic Rosenau said:

We are in the process of revising our Bylaws, and in my research, I came across this article by Gene Takagi on the Nonprofit Law Blog: “Nonprofit Directors and Officers – Not the Same Thing” where he says:

So, I want to be sure that our Bylaws do say that: 

ARTICLE #: OFFICERS. Section #. Officers and Duties. The officers of the Society shall be a President, a Vice President, a Secretary, a Treasurer, and [up to] [eight] directors. … 

ARTICLE #: EXECUTIVE BOARD. Section #. Board Composition. The officers of the Society, including the directors, shall constitute the Executive Board.

(the “and [up to] [eight] directors” part is under discussion and may be revised to simply "and X directors" with the value of X still to be determined. 

I think that covers it, but I wonder if we need to say something more explicit such as a sentence along the lines of, "All officers are ex officio directors." 

Thank you in advance for your help. I greatly value everything I have learned from this forum and appreciate how thoughtful, thorough, and clear everyone has been.  

I don't think they are ex-officio directors.  I think they are directors.

[Joshua Katz]

On 6/12/2024 at 5:13 PM, Gary Novosielski said:

I don't think they are ex-officio directors.  I think they are directors.

Why not? If the bylaws provide that the President is a member of the board, isn't he a member of the board by virtue of his position?

[Richard Brown]

On 6/12/2024 at 7:13 PM, Gary Novosielski said:

I don't think they are ex-officio directors.  I think they are directors.

 

On 6/12/2024 at 8:15 PM, Joshua Katz said:

Why not? If the bylaws provide that the President is a member of the board, isn't he a member of the board by virtue of his position?

I agree with Mr. Katz. It appears plain to me that the officers are directors by virtue of the offices which they hold. However, as a practical matter, I don’t see that it makes any difference.

[Nic Rosenau]

Thank you, everyone. I now feel confident those sections of the Bylaws are sufficient (or will be once the value of X is agreed upon). This forum is such a wonderful resource. I sincerely appreciate your time and your willingness to share your expertise. 

[Gary Novosielski]

On 6/12/2024 at 9:15 PM, Joshua Katz said:

Why not? If the bylaws provide that the President is a member of the board, isn't he a member of the board by virtue of his position?

Yes, he is, but this whole question seems to me to be backward.   

The question that usually arises is not whether the president is a director, but whether directors are officers.  RONR recommends that the bylaws make it clear that all directors are officers.   Since they are elected to office, I don't know why this question arises, but apparently it frequently does.

But there is no need to assert that the president is a director.  I can't imagine a situation where that would even come up, that law article notwithstanding.  Have any of the lawyers here ever seen a case where an action adopted by a board was considered not duly adopted because the bylaws didn't say that some officers were ex-officio directors?  Are they any less board members?  It's absurd.

I'm not a lawyer but that sounds like gibberish to me.  As long as the members of the board are clearly defined, their votes count—as least as far as RONR is concerned.  

[Joshua Katz]

I have to admit, I'm at a loss to understand this response. It seems obvious to me that if the bylaws a) say to elect a president, and b) also establish a board, but c) do not also say that the president is a member of the board, then the president is not a member of the board. The reason the president is, in every case I've seen, a member of the board is because the bylaws say so. If they fail to say so, then he's not a member.

[Richard Brown]

Officers are not necessarily directors and don’t even need to be members if RONR is the controlling authority.  They are not directors unless the bylaws or other governing documents, such as a corporate charter, say they are. The fact that they almost always are directors doesn’t mean that they are in every case. 

[Gary Novosielski]

On 6/13/2024 at 11:56 PM, Joshua Katz said:

I have to admit, I'm at a loss to understand this response. It seems obvious to me that if the bylaws a) say to elect a president, and b) also establish a board, but c) do not also say that the president is a member of the board, then the president is not a member of the board. The reason the president is, in every case I've seen, a member of the board is because the bylaws say so. If they fail to say so, then he's not a member.

Yes, that's true but the "legal advice" article claimed that if the bylaws made the president/VP/Sec'y members of the board but forgot to call them "Directors" that somehow that might invalidate board votes.  Nonsense.  

[Gary Novosielski]

On 6/13/2024 at 11:56 PM, Richard Brown said:

Officers are not necessarily directors and don’t even need to be members if RONR is the controlling authority.  They are not directors unless the bylaws or other governing documents, such as a corporate charter, say they are. The fact that they almost always are directors doesn’t mean that they are in every case. 

Very true.  But if they are specifically named as members of the board but not as directors, that can't be used to argue that they're not board members.