[United States Statutes at Large, Volume 121, 110th Congress, 1st Session]
[From the U.S. Government Publishing Office, www.gpo.gov]

121 STAT. 103

Public Law 110-26
110th Congress

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. [NOTE: May 11, 2007 -  [H.R. 1681]

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress [NOTE: The American National Red
Cross Governance Modernization Act of 2007. 36 USC 101
note.] assembled,
SECTION 1. SHORT TITLE.

This Act may be cited as the ``The American National Red Cross
Governance Modernization Act of 2007''.
SEC. 2. [NOTE: 36 USC 300101 note.] 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--

[[Page 104]]
121 STAT. 104

(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

[[Page 105]]
121 STAT. 105

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--

[[Page 106]]
121 STAT. 106

(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).

[[Page 107]]
121 STAT. 107

``(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.

[[Page 108]]
121 STAT. 108

``(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:

[[Page 109]]
121 STAT. 109

``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.

[[Page 110]]
121 STAT. 110

``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.''.

Approved May 11, 2007.

LEGISLATIVE HISTORY--H.R. 1681 (S. 655):
---------------------------------------------------------------------------

HOUSE REPORTS: No. 110-87 (Comm. on Foreign Affairs).
CONGRESSIONAL RECORD, Vol. 153 (2007):
Apr. 17, considered and passed House.
Apr. 23, considered and passed Senate.