Dear Fellow Congregants,

After considerable study and discussion, your Board of Trustees is proposing revisions to Central Synagogue’s By-laws.

The decision to revise our By-laws was motivated by (i) the recently enacted New York Non-Profit Revitalization Act of 2013, and (ii) our desire to clarify language and have the By-laws better reflect how Central functions today.

We are required by law to hold two meetings to discuss the proposed By-laws changes, with action formally taken at the second of these meetings. Accordingly, we will be discussing the proposed By-laws revisions at our Annual Meeting on May 21, 2015, and then again at a Special Meeting to be convened in June; you will receive special notice and another proxy for the June meeting.

The below memo highlights and explains the more significant proposed By-laws changes. Additionally, we are providing two copies of the proposed By-laws. One is a clean copy (the “Draft”), and the second is a marked copy showing all changes between the Draft and our current By-laws, which were last revised in 2007. Please note that in the marked version, the blue tepxt is new, the green text has been moved around in some manner, and the red text reflects language that has been deleted.

By-Laws Draft | By-Laws Redline

We encourage you to review these materials, and we look forward to answering any questions you may have at our upcoming meetings.

Very truly yours,

David Edelson

President

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Memo: Proposed Changes to the By-Laws

Background

As many of you know from your work with other organizations—either for-profit or not-for-profit—by-laws are, essentially, the rules we adopt to govern ourselves. New York law, in our case principally the New York Not-for-Profit Corporation Law, sets out the parameters for key elements of corporate governance, but leaves many of the detailed elements of governance up to the discretion of each particular organization.  Such details classically include: the characteristics of membership; the composition, duties and authority of the Board of Trustees and Officers; the composition of key committees; the mechanics of how meetings of members, or the Board, or committees, are convened and conducted; and, finally, how the by-laws themselves may be amended.

The Revitalization Act

The New York Non-Profit Revitalization Act of 2013 was signed into law at the end of 2013; it was the first major overhaul of New York’s Not-For-Profit Corporation Law (“NPCL”) in well over forty years, and incorporated many elements of “modern corporate governance” that have evolved over time in corporate law relating to for-profit corporations. The Revitalization Act went into effect in mid-2014. Many of the changes made in our proposed revised By-laws (the “Draft”) reflect the adoption of new standards or new elements mandated by this change in New York’s law governing non-profit corporations. Other changes reflect refinements to better reflect how Central, its Board and its Officers actually function today.

Guide to Changes

Membership Issues (Article II)

• We have encountered situations in which a congregant dies and, while the surviving spouse or partner is not Jewish, he or she nevertheless continues to raise the children as Jews and wishes to remain an active member of the Congregation. The wording change at the beginning of Section 1 is designed specifically to address this situation.
• In Section 1, the change in the age of dependent children from 23 to 26 reflects the reality that many members’ children may still be students or otherwise dependent on their parents until this later age. Twenty-six was chosen to be consistent with the current age that children may still be covered under their parents’ health insurance.
• In Section 2, the concept of the category of “Clergy Member” was added to reflect the fact that our pulpit clergy are considered members of our Congregation, albeit in an ex officio, non-voting capacity (Section 4).

Entire Board Concept (Article III)

• In Section 1, the “entire Board” concept is introduced. The NPCL has always had the concept that certain changes require the affirmative approval of a majority of the “entire Board” or even two-thirds of the “entire Board”.  These are actions of sufficient significance that they are deemed inappropriate for decision by the normal mechanics of a board, namely, approval by a majority of the board at a meeting at which a quorum is present.
• The Revitalization Act clarifies how one determines the number of members of the board that actually constitute the “entire Board,” and indeed, allows that determination to be made automatically as we increase or decrease the size of the board.  This explains the small wording changes in Sections 1 and 2, and the other references to the “entire Board” that show up in additional changes to the By-laws.

Changes Due to Technology (Articles IV, V, and VI)

New York State law now recognizes the ubiquity of email in today’s world, and thus, the By-laws now reflect the ability to use email for notices of meetings of the membership of the Congregation and for the granting of proxies to be voted at such meetings. The Revitalization Act also permits the use of emails by Trustees in those situations where we would be collecting written consent for those actions where we might seek “unanimous written consent” of our Board in lieu of a meeting.

Accordingly, beginning in Article IV, Section 3 and continuing through a number of other sections and articles (including Articles V and VI), you will see references to email and how it may properly be utilized. The Revitalization Act also contemplates the use of video-conferencing equipment for participation in board meetings.

Congregational Meetings and Nominations (Articles IV and V)

• In Article IV, Section 2, given the size of our Congregation, we have increased the number of members required to call a special meeting of the Congregation.
• In Article IV, Section 3, we have changed the notice provision for annual and special meetings of the Congregation to ensure consistency with New York State law.
• In Article IV, Section 4, given the new requirements in the Revitalization Act, we have increased, modestly, the number of members required to establish a quorum. However, since attendance at many annual and special meetings is often very sparse, we were advised to stick with a figure that was at the low end of the permitted range.
• In Article V, Section 3(b), given the size of our Congregation, we have increased the number of members required to submit proposals for alternative nominations of Trustees and Officers.

Audit Committee (Article IX)

Although Central has had an active Audit Committee for many years and has previously adopted a Conflict of Interest Policy and Whistleblower Policy, the requirements for the Audit Committee and such policies were not previously spelled out in the NPCL. Under The Revitalization Act, they now are, and the Audit Committee must be comprised only of Trustees. This change is reflected in the Draft, as well as in a revised Audit Committee charter. We are also reviewing our Conflict of Interest Policy and Whistleblower Policy to ensure that they are in compliance with the new requirements under the Revitalization Act.

Other Committees (Article IX)

• The Revitalization Act creates a new distinction between committees of the Board—composed entirely of trustees (e.g., the Audit Committee)—and committees of the Congregation—composed of trustees and other participants or advisors. Under the Revitalization Act, committees that are composed of both trustees and other individuals are no longer empowered to act on behalf of the Congregation—their decisions may only be advisory in nature, and will need to be separately approved by the Board or by a committee composed entirely of trustees, such as, for example, the Executive Committee.
• We clarified that the President can attend, as an ex officio voting member, any meetings of committees. The Senior Rabbi can attend, as a non-voting member, meetings of any committees other than the Audit and Nominating Committees.
• We have also added a new section to establish the quorum requirements for all committees (Article IX, Section 5).

Powers and Duties of Officers (Article VII)

• Article VII contains a number of smaller changes, rearrangements, or adjustments that largely reflect how we currently run Central, namely with a set of “board officers” and with a set of key managerial staff members. The Treasurer, for example, is a board officer, but he or she really does not have dominion over or actively manage the funds of the Congregation. Rather the Chief Financial Officer does so. Similarly, functions of the Secretary are often delegated as well. Accordingly, we have changed the description of the Treasurer and Secretary to clarify that they perform more of a supervisory role, rather than have responsibility for day-to-day administration (Article VII, Sections 3 and 4).
• Also, under the changes brought about by the Revitalization Act, no employee of the corporation may serve in the capacity of either the Chairperson of the Board (or co-Chairpersons) or the President of the Board, so we added this element (Article V, Section 2 (b)). Under our existing By-laws (and this has not changed in the Draft), only “Regular Members” can become Trustees and/or Officers (Article V, Section 2), and it is our policy at Central that employees cannot become “Regular Members,” so this has, in fact, always been the case for us.

There are other changes throughout the document, but the ones outlined above represent the significant changes.

We hope this explanation will facilitate your review of the By-laws.

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