[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6343 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 6343
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.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 5, 2006
Mr. Radanovich (for himself and Ms. Harman) introduced the following
bill; which was referred to the Committee on International Relations
_______________________________________________________________________
A BILL
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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``The American National Red Cross
Governance Modernization Act of 2006''.
SEC. 2. FINDINGS.
Congress finds the following:
(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. Recommendations from the Governance Report calling for
amendments to the Congressional Charter are set forth in this
legislation.
(4) This legislation seeks 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) This legislation also is intended to clarify the role
of the Board of Governors as a governance and strategic
oversight board. As the Governance Report contemplates, The
American National Red Cross is expected to implement amendments
to its bylaws consistent with those described in the Governance
Report to clarify further the role of the Board of Governors
and to outline 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) The selection of members of the Board of Governors is a
critical component of effective governance for The American
National Red Cross. As the Governance Report contemplates, The
American National Red Cross is expected to implement amendments
to its bylaws to provide a method of selection consistent with
that described in the Governance Report. The new method of
selection would replace the current process by which--
(A) 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;
(B) 12 at-large members of the Board of Governors
are nominated by a Board committee and elected by the
Board of Governors; and
(C) 8 members of the Board of Governors are
appointed by the President of the United States.
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
legislation. 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. 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. The changes to the Congressional Charter of The
American National Red Cross affected by this legislation are
not intended to alter that status. This legislation therefore
confirms the status of The American National Red Cross as an
instrumentality of the United States and acknowledges as
unaffected the rights and obligations of The American National
Red Cross to carry out its purposes as set forth in the
Congressional Charter.
(8) Given the role of The American National Red Cross in
disaster relief and assistance, blood services, and in meeting
international treaty and other obligations, the effectiveness
of The American National Red Cross will be promoted by the
creation of an organizational ombudsman to be the 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. The American National Red Cross ombudsman
will report to the chief executive officer and the audit
committee of the Board of Governors and will have access to
anyone and any documents in The American National Red Cross.
(9) 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. This 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 legislation. Federal and State action play an
important role by setting standards, rooting out violations,
and informing the public. 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. Congress nevertheless expects The American
National Red Cross to maintain appropriate communications with
State regulators of charitable organizations and to cooperate
with them as appropriate in specific matters as they arise from
time to time.
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--
(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).
``(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.
``(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.
Paragraph (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:
``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.
``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.--The Office of the Ombudsman shall submit a report
annually to Congress concerning any trends and systemic matters that
the Office of the Ombudsman has identified as confronting the
corporation.''.
(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.''.
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