To Bylaw or not to Bylaw: An Introduction to Policies
Who this resource is for: BC Societies
Who created it: © Pacific Legal Education and Outreach Society (PLEO), 2020
What are policies and what do they do?
Policies are one set of the layers of rules that a non-profit is bound by:
Lawyer #1: There are laws that the government and judicial system enact that apply to non-profits (in BC, primarily the Societies Act).
The next layer of guidelines is your organizations’ Constitution, which describes the purpose and mission of organization.
After that are more detailed bylaws. Members approve the Constitution, and if Constitutional changes are made, Members approve bylaws. Bylaws can’t be changed without knowing who your members are and engaging them appropriately.
Policies are usually passed by the board, but there are policies that are operational policies passed by staff that the board doesn’t need to approve.
What are the two kinds of policies?
Two kinds of policies: prescriptive and proscriptive
A prescriptive policy is a directive and anything that says, “This is what we’re going to do” (e.g. “We will build an operating reserve”, “we will pay above average salaries”, “we will consult with our members every 6 months”).
Your organizational culture will help formulate prescriptive policies. You want to be realistic to how your organization operates and what its values are.
A proscriptive policy limits something and clarifies boundaries around something (e.g. “We won’t accept donations from fossil fuel companies”, “The Executive Director can’t spend more than a certain amount without board approval”).
Proscriptive policies are often about process, which are practices that your organization often has in place (i.e. “We don’t do it that way”).
It is helpful to think about: what is your organization trying to accomplish with this? Are you trying to make a statement of what you require your organization to do, or what you want to bound your organization to?
Why should an organization implement policies?
We advise organizations to be proactive in creating policies. Most often, organizations implement policies reactively: when a problem or perceived problem has occurred, and a policy is drafted to guide the organization in how to react. The challenge in that is it’s often confusing for future people in your organization because the policies would have been articulated in a context that may be too specific to the current situation.
How are policies proactively implemented?
A proactive process would involve setting annual reviews for policies. Stagger these reviews so that every few years you check in on different policies that you have in place.
It is good to have a committee dedicated to policy review, or be clear which existing committee has responsibility for which policy.
Engage staff and experts. Governance is not just the Board, but also Senior Staff and Board together. Ask: what is the engagement in terms of policies that will work for everyone?
Get a legal review of the organization’s policies.
What policies should an organization have? What do they cover?
These lists are non-exclusive, but cover areas that are generally recommended to be written into policies.
a) Board policies
Act as a framework for board to make decisions
Provide guidance on how to implement decisions
Create consistent expectations for board members that are consistent
Provide boundaries on communications
Provide valuable orientation and training for everyone involved – way to understand some of the bottom lines for orgProtect rights of clients and staff, board members, volunteers, members, etc.
b) Governance policies
Role descriptions for any key players on the Board (e.g. Board Chair, Vice-Chair, Secretary, Treasurer and other board members)
Conflict of interest policy and code of conduct
Policies that explain key board responsibilities: financial governance policies, self-reviewing the Executive Director’s performance, Board self-assessment practices, etc.
Operating guidelines for board and staff
c) Financial policies
Ensure regulatory compliance: payments to directors, travel and expense reimbursements, access to bank accounts, etc.
d) HR policies
Recruitment
Compensation
Code of Conduct
Conflict resolution
Disciplinary process and termination
Layoffs
e) How do I get started in drafting policies?
Study organization’s current practices. Gather documents and information.
Define organization’s mission and values (both spoken and unspoken) with a clear statement of why organization exists.
Assess governance structure – how board, committee, volunteers, staff work together and interact.
Define who does what. It helps clarify who is responsible and what is needed.
Define issues and challenges. It helps prioritize policies that need to be developed.
What are some tips for writing policies?
Writing policies is simply putting on paper what your organization is already doing.
Write in clear and plain language. You want people who read years from now to understand and make sense of it.
Ensure consistency in structure, format, content. Use a template.
Be clear who is writing: Board, staff?
What should be in your bylaws, and what should be a policy?
Bylaws are prescriptive and consist of things you absolutely want your members to approve as structure for the organization. Policies can be changed by the Board as your organization changes, while bylaws are more set in stone.
Bylaws also cannot be enforced by the BC Societies Act. Policies are enforceable through other avenues (e.g. Human Rights Code).
Some examples:
Member discipline and removal. If the organization needs to have disciplinary rules, you may need to put them in bylaws as it ensures higher level of accountability. At a minimum it should be a policy.
Overtime and staff volunteering. Policy. There are legal requirements that must be met and should not be subject to a member decision.
Board discipline and removal. Bylaws. If the board is the one deciding how to discipline/remove itself, that poses a challenge. Members may want input.
Conflict resolution (staff/board). Policy. This needs to reflect the organization's values.
Remuneration of Directors. Bylaws. This needs to be disclosed in financial statements . Government funders will also require it.
Board job description. Policy. You may want to change this as your organization grows or shrinks.
Privacy and confidentiality. Policy.
Budget process and calendar. Policy.
Equal opportunity/diversity. Broader policies like this one, are effective as a policy as they can be enforceable through other avenues. If you want members to make it more specific, it can be laid out in bylaws.
Member voting rights. Bylaw.
Where can I look for examples of policies?
BC Non-Profit Housing Association has housing-related templates. Their templates are dated and are in the process of being updated.
Governing Good has templates that are easier to understand and have less jargon.
Many organizations have posted their policies online, and many are willing to share. It is recommended to email other like-minded organizations (as there may be special considerations that their policies would cover).
Additional resources
Still have questions?
Submit an inquiry* to our Ask a Law Student service at the link below. https://www.pacificlegaloutreach.com/ask-a-law-student-1
* Our law students can only provide general legal information, not advice about what steps you should take in your specific circumstance. They also cannot provide legal opinions.