What are the ASNT Bylaws and why are they important?
The ASNT Bylaws are the rules the Society follows to govern itself. They specify the categories and rights of members; the composition, election process and terms for Board officers and directors; and the committee, council and section structure of the Society.
Used properly, Bylaws guide how the Board and its committees govern the Society. Therefore, much thought and deliberation should be invested in writing them, so that they aid and do not hinder effective governance. Poorly written Bylaws, or Bylaws that are inconsistent with other governing documents such as policies, make it difficult for the Society to run itself effectively.
Unlike the ASNT Articles of Incorporation which are filed with the state of Ohio, the Bylaws are not submitted to the state and they do not need to be made public. They are an internal-use document only. However, this does not mean that ASNT may ignore or deviate materially from the Bylaws, as failing to comply with governing documents could lead to someone – such as a member, or creditor - objecting to how the Society is being managed and filing a civil complaint in state court or with the state Attorney General.
What problem are we trying to solve with this change?
Over the years, the Bylaws have been modified here and there to address various issues and concerns that have come up. Over the past few months a number of problems with the Bylaws have become evident as we conduct the business of the Society; these problems have slowed the work of the Board, and created situations which were impossible to comply with what was written into the Bylaws.
One such situation is created because many provisions are specifically tied to conferences; in the best of times these provisions were awkward, but in this year of the pandemic they make it impossible to govern. For example, Article III, Section 2 requires “Terms of Directors at Large and Council Directors shall be for three (3) years maximum and commence immediately at the conclusion of the final Board meeting of the Annual Conference.” What happens if, as will be the case this year due to the pandemic, the Annual Conference is held virtually and the Board does not meet at the conference? Do the Directors continue to serve indefinitely?
In other places, the Bylaws simply do not make sense. For example, Article II, Section 4 requires “At the annual business meeting of the Voting Members, ratification of the ballot electing the Officers and designating newly elected Directors shall be automatic, and such ratification shall be entered into the official minutes of the annual business meeting.” Why do the election results need to be ratified, and if so, what do we mean by it “shall be automatic”? What if the members who attend the annual business meeting, which usually numbers less than 100 people, vote against the officers and directors elected by the members through ballots? Does this overturn the results of the election wherein more than 2,000 members voted? That would seem unfair, but this section of the Bylaws might lead one to make that conclusion.
There are more than a few of such provisions that are problematic and need to be remedied. The Board believes the most effective way to address the Bylaws is holistically and in totality, through a complete rewrite rather than through a series of separate edits and tweaks. This will require extensive research, guidance from the attorneys, and deliberation amongst the Board to resolve. The Board believes that given its challenges described here, as well as its fiduciary duty to govern the Society, the most effective path forward is to transfer responsibility for Bylaws amendments from the members to the Board.
How do other associations manage their Bylaws?
In a review of peer associations, and the association industry in general, we find that the responsibility for approving Bylaws amendments frequently rests with the Board of Directors. For example:
- The Boards of NACE International, the American Welding Society (AWS), and the American Society for Quality each hold the authority to approve Bylaws changes. The American Society for Association Executives (ASAE) also does it this way.
- A benchmark study conducted by ASAE in 2018 showed that 40% of membership associations assign the authority to approve Bylaws changes to the Board of Directors, and this number is increasing. Often there are added provisions requiring super-majority (2/3rds affirmative) to approve, and pre- and post-change notification requirements to Society members for transparency (both of which are included in the proposed ASNT Bylaws revision).
Has ASNT always done it this way (with members approving Bylaws amendments)?
No, at one time the ASNT Board of Directors had the authority to approve Bylaws changes, but it was changed to shift the authority to the members. The current proposal basically reverts back to the former system where the Board held the authority to change the Bylaws. However, the current proposal adds new requirements to communicate Bylaws change proposal to the members, and to allow members opportunities to review and comment prior to the Board’s voting on Bylaws changes. This is intended to provide a system of transparency and inclusion for the members, as well as checks and balances to prevent the Board from acting without the engagement of the members.
Why wasnt I allowed the opportunity to review and discuss the current Bylaws change proposal?
Members are allowed and encouraged to review the Bylaws change proposal and provide comments to the Board.
The proposal was published on August 1, 2020 in ME as well as the ASNT website, an email ballot was sent to all members with valid email addresses, and for members without an email address a ballot was mailed to their address of record. In addition, President McGloin announced the proposal in his ME article in June. Lastly, we plan to hold a virtual membership meeting in October to discuss the proposal (date and time to be announced) in accordance with the current Bylaws. If members want to vote by ballot, they should submit their ballot no later than September 22, 2020. (This is another example of awkward provisions in our current Bylaws, where if the member votes by ballot, it must be received at ISC at least 15 days prior to the meeting).
The process used for the proposed Bylaws revision is what is currently specified in the Bylaws and in ASNT Policy, and what has been followed previously. This gives members 53 days to review, discuss, and ask questions about the proposal. We should point out that under the proposed change, the Board would be required to publish the proposed change to members at least 45 days prior to voting on it, and they would be prohibited from voting on it until all member questions were answered. There is no such restriction today.
Does this allow the Board of Directors to take over the Society?
The Board of Directors holds legal authority over the governance and operation of ASNT, in accordance with Ohio state law. They already “run” the association.
It is important to remember that individual Officers and Directors are ASNT members like you, elected to represent the interests of the entire Society and not one faction or subsidiary group (like a Section, Committee or Council), their employer, or themselves. They have a legal duty to serve the association’s interests, and not their own. Each Board member signs an oath and pledge to disclose actual and potential conflicts of interest, which are then addressed by the Board. Failure of the Board to police such conflicts exposes them to legal action by any interested party.
Board members are volunteers who give extraordinary amounts of their time and energy to the Society without compensation. Many lose income due to the extensive time commitments to serve on the Board. Others pay for their own travel to attend Board meetings and other Society events which require their attention. These people are motivated by a deep sense of commitment to the Society and have no interest in “self-dealing”. However, should an unethical Board member seek to turn their Board role into a personal benefit through self-dealing, the other Board members would intervene.
If the power to change the Bylaws is transferred to the Board who can stop them from taking actions?
As stated previously, the Board of Directors already holds legal authority over the governance and operation of ASNT, in accordance with Ohio state law. It is the Board’s duty to decide what is in the Society’s best interests, and to ensure such interests are cared for.
In making such decisions, the Board has three legal duties:
- the duty to take care of the nonprofit by ensuring prudent use of all assets, including facility, people, and good will;
- the duty to remain loyal to its mission, to recognize and disclose conflicts of interest, and to make decisions that are in the best interest of the Society, not the individual board member (or any other individual or for-profit entity);
- the duty to obey applicable laws and regulations and its own bylaws.
There are four controls over the Board’s actions: the Board itself, the members, the state of Ohio, and the Federal government (for tax issues and antitrust issues). Typically, individual Officers and Directors act to ensure the Board upholds its three duties; its power extends to removing a volunteer from the Board. Members hold the power to elect Officers and Directors and can influence the actions of the Board through the elections, and by reporting suspected violations of the Board’s fiduciary duties to appropriate authorities.
In more extreme cases, such as if the Board violates its nonprofit purpose, or acts illegally, the Ohio Attorney General can intervene, or members can file a complaint in civil court. If the Board fails to comply with nonprofit tax regulations, or violates its nonprofit charter, members can notify the IRS for intervention.
Does this change allow the Board of Directors to extend their own terms indefinitely?
If the Board were given the authority to approve Bylaws changes as proposed, an unethical Board member could attempt to persuade the remaining Board members to approve such a measure. However, there are two specific controls in place to prevent such an abuse. First, the proposed procedure requires advanced disclosure to the members for all Bylaws amendments. Members could question or challenge the Board directly about such a proposal, holding the Board accountable for its actions. Second, the Board serves as a check and balance against individual Officers and Directors; a motion to extend terms of office to the benefit of an individual Director or a group of Directors would likely be challenged and killed before ever coming to a Board vote
Who initiated this change?
The changes detailed in the proposal emerged from multiple conversations over a period of several years between numerous Board members, some of whom are currently serving on the Board and some of whom are no longer on the Board. The current pandemic further exposed inherent weaknesses in the Bylaws, making the change a priority for the Board to address. The proposal was not initiated by any one individual.