[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1681 Enrolled Bill (ENR)]
H.R.1681
One Hundred Tenth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Thursday,
the fourth day of January, two thousand and seven
An Act
To amend the Congressional Charter of The American National Red Cross to
modernize its governance structure, to enhance the ability of the board
of governors of The American National Red Cross to support the critical
mission of The American National Red Cross in the 21st century, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``The American National Red Cross
Governance Modernization Act of 2007''.
SEC. 2. FINDINGS; SENSE OF CONGRESS.
(a) Findings.--Congress makes the following findings:
(1) Substantive changes to the Congressional Charter of The
American National Red Cross have not been made since 1947.
(2) In February 2006, the board of governors of The American
National Red Cross (the ``Board of Governors'') commissioned an
independent review and analysis of the Board of Governors' role,
composition, size, relationship with management, governance
relationship with chartered units of The American National Red
Cross, and whistle blower and audit functions.
(3) In an October 2006 report of the Board of Governors,
entitled ``American Red Cross Governance for the 21st Century''
(the ``Governance Report''), the Board of Governors recommended
changes to the Congressional Charter, bylaws, and other governing
documents of The American National Red Cross to modernize and
enhance the effectiveness of the Board of Governors and governance
structure of The American National Red Cross.
(4) It is in the national interest to create a more efficient
governance structure of The American National Red Cross and to
enhance the Board of Governors' ability to support the critical
mission of The American National Red Cross in the 21st century.
(5) It is in the national interest to clarify the role of the
Board of Governors as a governance and strategic oversight board
and for The American National Red Cross to amend its bylaws,
consistent with the recommendations described in the Governance
Report, to clarify the role of the Board of Governors and to
outline the areas of its responsibility, including--
(A) reviewing and approving the mission statement for The
American National Red Cross;
(B) approving and overseeing the corporation's strategic
plan and maintaining strategic oversight of operational
matters;
(C) selecting, evaluating, and determining the level of
compensation of the corporation's chief executive officer;
(D) evaluating the performance and establishing the
compensation of the senior leadership team and providing for
management succession;
(E) overseeing the financial reporting and audit process,
internal controls, and legal compliance;
(F) holding management accountable for performance;
(G) providing oversight of the financial stability of the
corporation;
(H) ensuring the inclusiveness and diversity of the
corporation;
(I) ensuring the chapters of the corporation are
geographically and regionally diverse;
(J) providing oversight of the protection of the brand of
the corporation; and
(K) assisting with fundraising on behalf of the
corporation.
(6)(A) The selection of members of the Board of Governors is a
critical component of effective governance for The American
National Red Cross, and, as such, it is in the national interest
that The American National Red Cross amend its bylaws to provide a
method of selection consistent with that described in the
Governance Report.
(B) The new method of selection should replace the current
process by which--
(i) 30 chartered unit-elected members of the Board of
Governors are selected by a non-Board committee which includes
2 members of the Board of Governors and other individuals
elected by the chartered units themselves;
(ii) 12 at-large members of the Board of Governors are
nominated by a Board committee and elected by the Board of
Governors; and
(iii) 8 members of the Board of Governors are appointed by
the President of the United States.
(C) The new method of selection described in the Governance
Report reflects the single category of members of the Board of
Governors that will result from the implementation of this Act:
(i) All Board members (except for the chairman of the Board
of Governors) would be nominated by a single committee of the
Board of Governors taking into account the criteria outlined in
the Governance Report to assure the expertise, skills, and
experience of a governing board.
(ii) The nominated members would be considered for approval
by the full Board of Governors and then submitted to The
American National Red Cross annual meeting of delegates for
election, in keeping with the standard corporate practice
whereby shareholders of a corporation elect members of a board
of directors at its annual meeting.
(7) The United States Supreme Court held The American National
Red Cross to be an instrumentality of the United States, and it is
in the national interest that the Congressional Charter confirm
that status and that any changes to the Congressional Charter do
not affect the rights and obligations of The American National Red
Cross to carry out its purposes.
(8) Given the role of The American National Red Cross in
carrying out its services, programs, and activities, and meeting
its various obligations, the effectiveness of The American National
Red Cross will be promoted by the creation of an organizational
ombudsman who--
(A) will be a neutral or impartial dispute resolution
practitioner whose major function will be to provide
confidential and informal assistance to the many internal and
external stakeholders of The American National Red Cross;
(B) will report to the chief executive officer and the
audit committee of the Board of Governors; and
(C) will have access to anyone and any documents in The
American National Red Cross.
(b) Sense of Congress.--It is the sense of Congress that--
(1) charitable organizations are an indispensable part of
American society, but these organizations can only fulfill their
important roles by maintaining the trust of the American public;
(2) trust is fostered by effective governance and transparency,
which are the principal goals of the recommendations of the Board
of Governors in the Governance Report and this Act;
(3) Federal and State action play an important role in ensuring
effective governance and transparency by setting standards, rooting
out violations, and informing the public;
(4) while The American National Red Cross is and will remain a
Federally chartered instrumentality of the United States, and it
has the rights and obligations consistent with that status, The
American National Red Cross nevertheless should maintain
appropriate communications with State regulators of charitable
organizations and should cooperate with them as appropriate in
specific matters as they arise from time to time; and
(5) while The American National Red Cross is and will remain a
Federally chartered instrumentality of the United States, and it
has the rights and obligations consistent with that status, The
American National Red Cross nevertheless should maintain
appropriate communications and collaborations with local,
community, and faith-based non-profit organizations, including
those organizations that work within minority communities.
SEC. 3. ORGANIZATION.
Section 300101 of title 36, United States Code, is amended--
(1) in subsection (a), by inserting ``a Federally chartered
instrumentality of the United States and'' before ``a body
corporate and politic''; and
(2) in subsection (b), by inserting at the end the following
new sentence: ``The corporation may conduct its business and
affairs, and otherwise hold itself out, as the `American Red Cross'
in any jurisdiction.''.
SEC. 4. PURPOSES.
Section 300102 of title 36, United States Code, is amended--
(1) by striking ``and'' at the end of paragraph (3);
(2) by striking the period at the end of paragraph (4) and
inserting ``; and''; and
(3) by adding at the end the following paragraph:
``(5) to conduct other activities consistent with the foregoing
purposes.''.
SEC. 5. MEMBERSHIP AND CHAPTERS.
Section 300103 of title 36, United States Code, is amended--
(1) in subsection (a), by inserting ``, or as otherwise
provided,'' before ``in the bylaws'';
(2) in subsection (b)(1)--
(A) by striking ``board of governors'' and inserting
``corporation''; and
(B) by inserting ``policies and'' before ``regulations
related''; and
(3) in subsection (b)(2)--
(A) by inserting ``policies and'' before ``regulations
shall require''; and
(B) by striking ``national convention'' and inserting
``annual meeting''.
SEC. 6. BOARD OF GOVERNORS.
Section 300104 of title 36, United States Code, is amended to read
as follows:
``Sec. 300104. Board of governors
``(a) Board of Governors.--
``(1) In general.--The board of governors is the governing body
of the corporation with all powers of governing and directing, and
of overseeing the management of the business and affairs of, the
corporation.
``(2) Number.--The board of governors shall fix by resolution,
from time to time, the number of members constituting the entire
board of governors, provided that--
``(A) as of March 31, 2009, and thereafter, there shall be
no fewer than 12 and no more than 25 members; and
``(B) as of March 31, 2012, and thereafter, there shall be
no fewer than 12 and no more than 20 members constituting the
entire board.
Procedures to implement the preceding sentence shall be provided in
the bylaws.
``(3) Appointment.--The governors shall be appointed or elected
in the following manner:
``(A) Chairman.--
``(i) In general.--The board of governors, in
accordance with procedures provided in the bylaws, shall
recommend to the President an individual to serve as
chairman of the board of governors. If such recommendation
is approved by the President, the President shall appoint
such individual to serve as chairman of the board of
governors.
``(ii) Vacancies.--Vacancies in the office of the
chairman, including vacancies resulting from the
resignation, death, or removal by the President of the
chairman, shall be filled in the same manner described in
clause (i).
``(iii) Duties.--The chairman shall be a member of the
board of governors and, when present, shall preside at
meetings of the board of governors and shall have such
other duties and responsibilities as may be provided in the
bylaws or a resolution of the board of governors.
``(B) Other members.--
``(i) In general.--Members of the board of governors
other than the chairman shall be elected at the annual
meeting of the corporation in accordance with such
procedures as may be provided in the bylaws.
``(ii) Vacancies.--Vacancies in any such elected board
position and in any newly created board position may be
filled by a vote of the remaining members of the board of
governors in accordance with such procedures as may be
provided in the bylaws.
``(b) Terms of Office.--
``(1) In general.--The term of office of each member of the
board of governors shall be 3 years, except that--
``(A) the board of governors may provide under the bylaws
that the terms of office of members of the board of governors
elected to the board of governors before March 31, 2012, may be
less than 3 years in order to implement the provisions of
subparagraphs (A) and (B) of subsection (a)(2); and
``(B) any member of the board of governors elected by the
board to fill a vacancy in a board position arising before the
expiration of its term may, as determined by the board, serve
for the remainder of that term or until the next annual meeting
of the corporation.
``(2) Staggered terms.--The terms of office of members of the
board of governors (other than the chairman) shall be staggered
such that, by March 31, 2012, and thereafter, \1/3\ of the entire
board (or as near to \1/3\ as practicable) shall be elected at each
successive annual meeting of the corporation with the term of
office of each member of the board of governors elected at an
annual meeting expiring at the third annual meeting following the
annual meeting at which such member was elected.
``(3) Term limits.--No person may serve as a member of the
board of governors for more than such number of terms of office or
years as may be provided in the bylaws.
``(c) Committees and Officers.--The board--
``(1) may appoint, from its own members, an executive committee
to exercise such powers of the board when the board is not in
session as may be provided in the bylaws;
``(2) may appoint such other committees or advisory councils
with such powers as may be provided in the bylaws or a resolution
of the board of governors;
``(3) shall appoint such officers of the corporation, including
a chief executive officer, with such duties, responsibilities, and
terms of office as may be provided in the bylaws or a resolution of
the board of governors; and
``(4) may remove members of the board of governors (other than
the chairman), officers, and employees under such procedures as may
be provided in the bylaws or a resolution of the board of
governors.
``(d) Advisory Council.--
``(1) Establishment.--There shall be an advisory council to the
board of governors.
``(2) Membership; appointment by president.--
``(A) In general.--The advisory council shall be composed
of no fewer than 8 and no more than 10 members, each of whom
shall be appointed by the President from principal officers of
the executive departments and senior officers of the Armed
Forces whose positions and interests qualify them to contribute
to carrying out the programs and purposes of the corporation.
``(B) Members from the armed forces.--At least 1, but not
more than 3, of the members of the advisory council shall be
selected from the Armed Forces.
``(3) Duties.--The advisory council shall advise, report
directly to, and meet, at least 1 time per year with the board of
governors, and shall have such name, functions and be subject to
such procedures as may be provided in the bylaws.
``(e) Action Without Meeting.--Any action required or permitted to
be taken at any meeting of the board of governors or of any committee
thereof may be taken without a meeting if all members of the board or
committee, as the case may be, consent thereto in writing, or by
electronic transmission and the writing or writings or electronic
transmission or transmissions are filed with the minutes of proceedings
of the board or committee. Such filing shall be in paper form if the
minutes are maintained in paper form and shall be in electronic form if
the minutes are maintained in electronic form.
``(f) Voting by Proxy.--
``(1) In general.--Voting by proxy is not allowed at any
meeting of the board, at the annual meeting, or at any meeting of a
chapter.
``(2) Exception.--The board may allow the election of governors
by proxy during any emergency.
``(g) Bylaws.--
``(1) In general.--The board of governors may--
``(A) at any time adopt bylaws; and
``(B) at any time adopt bylaws to be effective only in an
emergency.
``(2) Emergency bylaws.--Any bylaws adopted pursuant to
paragraph (1)(B) may provide special procedures necessary for
managing the corporation during the emergency. All provisions of
the regular bylaws consistent with the emergency bylaws remain
effective during the emergency.
``(h) Definitions.--For purposes of this section--
``(1) the term `entire board' means the total number of members
of the board of governors that the corporation would have if there
were no vacancies; and
``(2) the term `emergency' shall have such meaning as may be
provided in the bylaws.''.
SEC. 7. POWERS.
Subsection (a)(1) of section 300105 of title 36, United States
Code, is amended by striking ``bylaws'' and inserting ``policies''.
SEC. 8. ANNUAL MEETING.
Section 300107 of title 36, United States Code, is amended to read
as follows:
``Sec. 300107. Annual meeting
``(a) In General.--The annual meeting of the corporation is the
annual meeting of delegates of the chapters.
``(b) Time of Meeting.--The annual meeting shall be held as
determined by the board of governors.
``(c) Place of Meeting.--The board of governors is authorized to
determine that the annual meeting shall not be held at any place, but
may instead be held solely by means of remote communication subject to
such procedures as are provided in the bylaws.
``(d) Voting.--
``(1) In general.--In matters requiring a vote at the annual
meeting, each chapter is entitled to at least 1 vote, and voting on
all matters may be conducted by mail, telephone, telegram,
cablegram, electronic mail, or any other means of electronic or
telephone transmission, provided that the person voting shall
state, or submit information from which it can be determined, that
the method of voting chosen was authorized by such person.
``(2) Establishment of number of votes.--
``(A) In general.--The board of governors shall determine
on an equitable basis the number of votes that each chapter is
entitled to cast, taking into consideration the size of the
membership of the chapters, the populations served by the
chapters, and such other factors as may be determined by the
board.
``(B) Periodic review.--The board of governors shall review
the allocation of votes at least every 5 years.''.
SEC. 9. ENDOWMENT FUND.
Section 300109 of title 36, United States Code, is amended--
(1) by striking ``nine'' from the first sentence thereof; and
(2) by striking the second sentence and inserting the
following: ``The corporation shall prescribe policies and
regulations on terms and tenure of office, accountability, and
expenses of the board of trustees.''.
SEC. 10. ANNUAL REPORT AND AUDIT.
Subsection (a) of section 300110 of title 36, United States Code,
is amended to read as follows:
``(a) Submission of Report.--As soon as practicable after the end
of the corporation's fiscal year, which may be changed from time to
time by the board of governors, the corporation shall submit a report
to the Secretary of Defense on the activities of the corporation during
such fiscal year, including a complete, itemized report of all receipts
and expenditures.''.
SEC. 11. COMPTROLLER GENERAL OF THE UNITED STATES AND OFFICE OF THE
OMBUDSMAN.
(a) In General.--Chapter 3001 of title 36, United States Code, is
amended by redesignating section 300111 as section 300113 and by
inserting after section 300110 the following new sections:
``Sec. 300111. Authority of the Comptroller General of the United
States
``The Comptroller General of the United States is authorized to
review the corporation's involvement in any Federal program or activity
the Government carries out under law.
``Sec. 300112. Office of the Ombudsman
``(a) Establishment.--The corporation shall establish an Office of
the Ombudsman with such duties and responsibilities as may be provided
in the bylaws or a resolution of the board of governors.
``(b) Report.--
``(1) In general.--The Office of the Ombudsman shall submit
annually to the appropriate Congressional committees a report
concerning any trends and systemic matters that the Office of the
Ombudsman has identified as confronting the corporation.
``(2) Appropriate congressional committees.--For purposes of
paragraph (1), the appropriate Congressional committees are the
following committees of Congress:
``(A) Senate committees.--The appropriate Congressional
committees of the Senate are--
``(i) the Committee on Finance;
``(ii) the Committee on Foreign Relations;
``(iii) the Committee on Health, Education, Labor, and
Pensions;
``(iv) the Committee on Homeland Security and
Governmental Affairs; and
``(v) the Committee on the Judiciary.
``(B) House committees.--The appropriate Congressional
committees of the House of Representatives are--
``(i) the Committee on Energy and Commerce;
``(ii) the Committee on Foreign Affairs;
``(iii) the Committee on Homeland Security;
``(iv) the Committee on the Judiciary; and
``(v) the Committee on Ways and Means.''.
(b) Clerical Amendment.--The table of sections for chapter 3001 of
title 36, United States Code, is amended by striking the item relating
to section 300111 and inserting the following:
``300111. Authority of the Comptroller General of the United States.
``300112. Office of the Ombudsman.
``300113. Reservation of right to amend or repeal.''.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.