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)providing oversight of the protection of
the brand of the corporation; and
(J)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; and
(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.
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.Paragraph (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.
.
Passed the Senate
March 15, 2007.
Secretary.