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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 655 Engrossed in Senate (ES)]

  
  
  
  
  
  
  
  
  
  
  
  
  
110th CONGRESS
  1st Session
                                 S. 655

_______________________________________________________________________

                                 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.

    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 2007''.

SEC. 2. 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 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.
            (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--
                    (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)(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 
        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; 
        and
            (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.

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.--
            ``(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.''.

            Passed the Senate March 15, 2007.

            Attest:

                                                             Secretary.
110th CONGRESS

  1st Session

                                 S. 655

_______________________________________________________________________

                                 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.
```