Staff Report 2002-03 By-law review Preamble The ED formed an informal working group to review the bylaws and report back to him with their recommendations. Discussion The bylaws were reviewed by the ByLaw Review Working Group. It came to the conclusion that no changes were absolutely necessary, but that some housekeeping changes should be considered. Jim Elder volunteered to review the recommendations on behalf of the ED and confirmed the conclusions. Recommendation I recommend that no by-law changes be made this year, with the following caveats: 1) We need to avoid written resolutions outside meetings; and 2) We need someday to update the bylaws to explicitly permit online AGMs. Appendix Comments from ByLaw Review Working Group > As promised, a brief review of my review of the by-laws. > > The bylaws look to me like they will continue to work for the NCF as I > understand its operations. However, they are less than clearly written and > could use some modification to reduce confusion in a number of areas, for > example the notice provisions for meetings. Some details of procedure are > omitted in the by-laws, such as the duties of the executive as a whole, and > explicit authority to use the simple show of hands voting (rather than > ballots) in a meeting. Also, I understand the NCF holds its annual > general meetings online, and I am uncertain how well that is provided for > in the current by-laws. In general, the by-laws could be revised and > improved without fundamentally changing their impact on NCF. However, there > are two areas that drew my attention as needing repair > > 1. The by-laws allow for resolutions to be passed by a written resolution, > signed by all members, in lieu of voting at annual/ general meetings. The > by-laws allow for these written resolutions in lieu of passed motions at > directors meetings as well, if signed by all directors. Changes to the Act > under which the NCF is incorporated no longer allow this clause in a > by-law, according to a text on the subject I consulted. This puts NCF in > the confusing position where if a member (or director) were to try to pass > a resolution by signature, without a meeting, as allowed by the bylaws ,> there would be a good possibility that the resolution would not be valid. > As it is unlikely the clauses are used, removing them could prevent any > such confusion arising. > > 2. The by-laws, in the final clause, state that the singular includes the > plural, the male the female and a person includes a corporation. I doubt it > was the intention of the drafters to allow corporations to vote in general > meetings, although they might have, but his is my interpretation of the > effect of that clause. I sincerely doubt the drafters intended to allow a > corporation to be the president of the NCF, which would also be allowed by > the current by-laws. If it was not the intention, this could be repaired > simply by removing the clause at the end, or by changing the words to > "individuals" wherever corporations are not intended to have the powers > granted by the by-laws. > > If the by-laws are to be changed, as I understand it, the process would be > to have a by-law amendment approved by the board and then by a 2/3 majority > of a membership meeting. They then have to be submitted to Industry Canada > for approval before they come into effect. > Additional comments from the working group Having spoken to Jim, and having assured him that changes to the bylaws are not absolutely necessary for the continuing function of NCF, although of course they would be desirable, I also promised to provide a source for my point 1 below (written resolutions not being substitutable for Director's meetings). On further consideration, my point 1 somewhat overstates the case, but I gleaned what I did from a text called "Non-Share Capital Corporations", by Burke-Robertson and Drake. However, Industry Canada's policy is as good as law here, since they have to approve any by-law changes to federally incorporated organizations. The point is most succinctly made on the Industry Canada Website, in the Annex on bylaws to the policy on incorporation, point D(1)- at the end, where it states: "Written resolutions are not allowed to replace director's meetings" From this I would assume directors could have written resolutions as long as the required actual meeting were also held. Never the less, I would exercise caution in employing your bylaw #11 in case there were no resolutions made at a meeting except those passed by written resolution... Not a likely scenario, I concede. Overall not a huge issue, as discussed with Jim. On another topic, it is notable that provision for electronic meetings in bylaws is ok by IC, but you need to make sure they are provided for in your by-laws. I don't see any provisions for internet voting in your bylaws, for either directors or general meetings, yet I understand that is how voting normally proceeds. You might want to consider this issue further. For more information -- The model bylaws are found at http://strategis.ic.gc.ca/SSG/cs00014e.html Information about the bylaws, from which I took the quote, is at http://strategis.ic.gc.ca/SSG/cs00011e.html#bylaws The policy summary on incorporation for non profits (from which the annex on bylaws is taken) is fairly handy itself: http://strategis.ic.gc.ca/SSG/cs00011e.html See also the list of Non Profit Kits and related Annexes, http://strategis.ic.gc.ca/sc_mrksv/corpdir/engdoc/7f.html - it tells you all the forms and processes needed to make changes. Let me know if any of this isn't clear, and if you need any further help in the future, please contact me.