110 HR 1681 RH: The American National Red Cross
U.S. House of Representatives
2007-04-16
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.This Act may be cited as the
The American National Red Cross
Governance Modernization Act of 2007
.
2.Findings; Sense of
Congress
(a)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
whistleblower 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)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.
3.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.
.
4.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.
.
5.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
.
6.Section 300104 of
title 36, United States Code, is amended to read as follows:
300104.
(a)
(1)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)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)The
governors shall be appointed or elected in the following manner:
(A)
(i)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
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)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)
(i)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
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)
(1)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)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)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)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)
(1)There
shall be an advisory council to the board of governors.
(2)Membership; appointment
by President
(A)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
ForcesAt least 1, but not more than 3, of the members of the
advisory council shall be selected from the Armed Forces.
(3)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)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)
(1)Voting by proxy is not allowed at any meeting of the
board, at the annual meeting, or at any meeting of a chapter.
(2)The
board may allow the election of governors by proxy during any emergency.
(g)
(1)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)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)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.
.
7.Subsection (a)(1) of section 300105 of title
36, United States Code, is amended by striking bylaws
and
inserting policies
.
8.Section 300107 of
title 36, United States Code, is amended to read as follows:
300107.
(a)The annual meeting of
the corporation is the annual meeting of delegates of the chapters.
(b)The annual meeting
shall be held as determined by the board of governors.
(c)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)
(1)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)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)The board of governors
shall review the allocation of votes at least every 5
years.
.
9.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.
.
10.Subsection (a) of
section 300110 of title 36, United States Code, is amended to read as
follows:
(a)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.
.
11.Comptroller general of
the United States and office of the ombudsman
(a)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:
300111.Authority of the
Comptroller General of the United StatesThe 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.
300112.
(a)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)
(1)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 committeesFor purposes of paragraph (1), the
appropriate Congressional committees are the following committees of Congress:
(A)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)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)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.
.
April 16, 2007
Reported with an amendment, committed to the Committee of
the Whole House on the State of the Union, and ordered to be
printed