Preparing for the Annual Business Meeting

Most churches conduct an annual business meeting for members. Many churches use the annual business meeting to elect board members, adopt a budget, approve reports, authorize the purchase or sale of church property, and discuss new items of business. As a church leader, you should be familiar with a number of issues that may arise in your annual church business meeting. This article reviews 15 of these issues. Familiarizing yourself with this information will help you prepare for the annual meeting.

As hard as it may be to believe, many church leaders cannot identify the current version of their church’s governing document (which we will refer to as the “bylaws”). Often there are multiple versions in circulation. Usually, this occurs because older versions not incorporating the most recent amendments are still being used. Prior to the annual business meeting the church board should identify the current version and have a copy available at the meeting.

This official version should be prominently dated (as of the most recent amendment) at the top of the cover page. A chronology of all amendments to the bylaws can be prepared by reviewing the minutes of all annual and special meetings. This chronology will enable church leaders to quickly identify obsolete versions of the bylaws. These versions should be discarded.

Check the church bylaws to see what they say about the identification of church members. It is common for church bylaws to call for a periodic review of the membership list so that the names of persons who fail to meet specified conditions can be removed. For example, it is common for church bylaws to limit members to persons who regularly attend or support the church. In such a case it is important for the church’s membership standard to be properly and consistently applied.

This is a task that should be done annually, pursuant to the process spelled out in the bylaws. Many church boards neglect this duty, and this often compounds the problem of deciding who are active voting members in good standing.

Many churches have bylaws that prescribe various qualifications for members of the board. This can present problems if members are allowed to make nominations from the floor during an annual business meeting. If your church bylaws contain a list of qualifications for members of the board, and board members are elected at annual business meetings, then it is a good practice for the church board to appoint a nominating committee that prescreens and selects a list of candidates who meet those qualifications.

Members should be advised during the membership meeting not to make additional nominations from the floor unless they have determined in advance that their nominee meets the qualifications specified in the bylaws.

The church membership ordinarily must be notified of the date, time, and place of annual membership meetings. In the case of a special meeting, the notice generally must state the purpose of the meeting (in addition to the date, time, and place).

The “notice” requirements usually are found in a church’s bylaws, but also may appear in the corporate charter or in the body of parliamentary procedure adopted by the church. If a church is incorporated and its bylaws do not address notice requirements, the state nonprofit corporation law ordinarily will contain the applicable requirements.

Unincorporated churches that have no bylaws or written regulations are bound by their established customs regarding notice of church membership meetings. A church must comply with the manner and method of giving notice prescribed in the bylaws. Failure to follow such requirements may render any action taken at the meeting invalid. However, a number of courts have ruled that members must object to defective notice at the meeting in question, and that a failure to do so will constitute a “ratification” of the defective notice.

A “quorum” refers to the minimum number of members who must be present at an annual or special business meeting in order for business to be transacted. This number usually is specified in a church’s bylaws. If it is not, then state nonprofit corporation law will specify a quorum if the church is incorporated. It is important for church board members to know the applicable quorum requirement.

Often there is confusion regarding the number of votes required to adopt a particular action. For example, if the church bylaws require a particular vote to be by “a majority of members,” does this mean a majority of the total church membership or a majority of those members present at a duly convened membership meeting?

A church can and should define the term majority of members to avoid this confusion. But if a church’s bylaws nowhere define majority of members, or any other term relating to the required number of votes needed to adopt an action, the fraction or percentage of votes needed to adopt an action generally refers to the members present at a duly called meeting and not to the entire church membership.

If a church’s bylaws do not designate the required percentage of votes for an affirmative action, then there is a presumption of majority rule. Church bylaws may impose a higher voting requirement than a simple majority for some actions. Common examples are the purchase or sale of real estate, and voting for a pastor. Board members should be familiar with all of the voting requirements specified in the bylaws to be sure that official actions are taken with the legally required number of votes.

Absentee voting is not ordinarily permitted unless specifically authorized by a church’s bylaws or by statute. Robert’s Rules of Order specifies: “An organization should never adopt a bylaw permitting a question to be decided by a voting procedure in which the votes of persons who attend a meeting are counted together with ballots mailed in by absentees, since in practice such a procedure is likely to be unfair.”

Proxy voting refers to voting by means of a substitute. For example, a church member appoints another member to vote on his behalf at a membership meeting that he cannot attend. Churches rarely intend to permit proxy voting. Robert’s Rules of Order specifically discourages it.

Few if any state nonprofit corporation laws require proxy voting, but some states permit it unless specifically repudiated in an incorporated church’s bylaws. Incorporated churches not wanting to recognize proxy voting should review their bylaws to determine if they contain a provision prohibiting it. If not, an amendment would be in order. It should not be assumed that a church’s formal adoption of Robert’s Rules of Order will result in the prohibition of proxy voting.

Votes can be cast orally, by show of hands, or by secret ballot. The method used is governed by the church’s bylaws. If these documents are silent, established church custom will control. The members present at a meeting can also approve of a particular manner of voting if the church’s bylaws do not address the subject.

The church board should designate a parliamentary committee to serve during the annual business meeting. If the church’s bylaws do not adopt a particular body of parliamentary procedure (there are several), they should be amended to do so. Church leaders should never assume that Robert’s Rules of Order automatically applies. It doesn’t.

Be sure to review the church’s bylaws to see what kinds of reports must be presented at the annual business meeting. To illustrate, some church bylaws require an annual audit, and a presentation of the audit at the annual business meeting. Be sure the church complies fully with such a requirement. Note that the word “audit” has a specific meaning. It does not include various “limited engagements” that CPAs can perform. If your bylaws call for an audit, be sure that the financial report that you present in your annual membership meeting is in compliance with your church bylaws.

Can the bylaws be amended in the course of an annual business meeting? Some church bylaws permit this to be done. However, it also is common for church bylaws to require advance notice of any proposed bylaw amendment, and this prevents members from proposing and enacting bylaw amendments during an annual business meeting. Church board members must be familiar with the amendment provision in the church bylaws.

Be sure to follow any other procedural requirements that are spelled out in the church bylaws. These may include the appointment of a recording secretary, the presentation and approval of a church budget, and a specified order of business.

Some churches disclose the salaries paid to staff members, while others do not. If your church does not disclose this information, you should be prepared to respond to a member who asks for this information during the annual business meeting. Some churches that do not disclose salary information will inform the congregation that all salaries are within the average ranges of compensation paid by other churches of the same size for similar positions (if such is the case). For help setting salaries that are within the avarage ranges, use information and tools available on ChurchSalary.

What if there are conflicting provisions in a church’s charter and bylaws (or other governing document) regarding the required number of votes necessary for adoption of a particular action? In general, provisions in the charter prevail over provisions in a church’s constitution, bylaws, or resolutions; provisions in the constitution prevail over provisions in the bylaws, or resolutions; and provisions in the bylaws prevail over provisions in resolutions. In most cases, an incorporated church is bound by the provisions of state nonprofit corporation law only where it has not expressly provided otherwise in its own charter, constitution, or bylaws.