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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘The American Na5 tional Red Cross Governance Modernization Act of 2007’’.
2

•S 655 ES

1 SEC. 2. FINDINGS; SENSE OF CONGRESS. 

2 (a) FINDINGS.—Congress makes the following find3 ings: 

4 (1) Substantive changes to the Congressional 

5 Charter of The American National Red Cross have 

6 not been made since 1947. 

7 (2) In February 2006, the board of governors 

8 of The American National Red Cross (the ‘‘Board of 

9 Governors’’) commissioned an independent review 

10 and analysis of the Board of Governors’ role, com11 position, size, relationship with management, govern12 ance relationship with chartered units of The Amer13 ican National Red Cross, and whistleblower and 

14 audit functions. 

15 (3) In an October 2006 report of the Board of 

16 Governors, entitled ‘‘American Red Cross Govern17 ance for the 21st Century’’ (the ‘‘Governance Re18 port’’), the Board of Governors recommended 

19 changes to the Congressional Charter, bylaws, and 

20 other governing documents of The American Na21 tional Red Cross to modernize and enhance the ef22 fectiveness of the Board of Governors and govern23 ance structure of The American National Red Cross. 

24 (4) It is in the national interest to create a 

25 more efficient governance structure of The American 

26 National Red Cross and to enhance the Board of 
3

•S 655 ES

1 Governors’ ability to support the critical mission of 

2 The American National Red Cross in the 21st cen3 tury. 

4 (5) It is in the national interest to clarify the 

5 role of the Board of Governors as a governance and 

6 strategic oversight board and for The American Na7 tional Red Cross to amend its bylaws, consistent 

8 with the recommendations described in the Govern9 ance Report, to clarify the role of the Board of Gov10 ernors and to outline the areas of its responsibility, 

11 including—

12 (A) reviewing and approving the mission 

13 statement for The American National Red 

14 Cross; 

15 (B) approving and overseeing the corpora16 tion’s strategic plan and maintaining strategic 

17 oversight of operational matters; 

18 (C) selecting, evaluating, and determining 

19 the level of compensation of the corporation’s 

20 chief executive officer; 

21 (D) evaluating the performance and estab22 lishing the compensation of the senior leader23 ship team and providing for management suc24 cession; 
4

•S 655 ES

1 (E) overseeing the financial reporting and 

2 audit process, internal controls, and legal com3 pliance; 

4 (F) holding management accountable for 

5 performance; 

6 (G) providing oversight of the financial 

7 stability of the corporation; 

8 (H) ensuring the inclusiveness and diver9 sity of the corporation; 

10 (I) providing oversight of the protection of 

11 the brand of the corporation; and 

12 (J) assisting with fundraising on behalf of 

13 the corporation. 

14 (6)(A) The selection of members of the Board 

15 of Governors is a critical component of effective gov16 ernance for The American National Red Cross, and, 

17 as such, it is in the national interest that The Amer18 ican National Red Cross amend its bylaws to provide 

19 a method of selection consistent with that described 

20 in the Governance Report. 

21 (B) The new method of selection should replace 

22 the current process by which—

23 (i) 30 chartered unit-elected members of 

24 the Board of Governors are selected by a non25 Board committee which includes 2 members of 
5

•S 655 ES

1 the Board of Governors and other individuals 

2 elected by the chartered units themselves; 

3 (ii) 12 at-large members of the Board of 

4 Governors are nominated by a Board committee 

5 and elected by the Board of Governors; and 

6 (iii) 8 members of the Board of Governors 

7 are appointed by the President of the United 

8 States. 

9 (C) The new method of selection described in 

10 the Governance Report reflects the single category of 

11 members of the Board of Governors that will result 

12 from the implementation of this Act: 

13 (i) All Board members (except for the 

14 chairman of the Board of Governors) would be 

15 nominated by a single committee of the Board 

16 of Governors taking into account the criteria 

17 outlined in the Governance Report to assure the 

18 expertise, skills, and experience of a governing 

19 board. 

20 (ii) The nominated members would be con21 sidered for approval by the full Board of Gov22 ernors and then submitted to The American 

23 National Red Cross annual meeting of delegates 

24 for election, in keeping with the standard cor25 porate practice whereby shareholders of a cor-
6

•S 655 ES

1 poration elect members of a board of directors 

2 at its annual meeting. 

3 (7) The United States Supreme Court held The 

4 American National Red Cross to be an instrumen5 tality of the United States, and it is in the national 

6 interest that the Congressional Charter confirm that 

7 status and that any changes to the Congressional 

8 Charter do not affect the rights and obligations of 

9 The American National Red Cross to carry out its 

10 purposes. 

11 (8) Given the role of The American National 

12 Red Cross in carrying out its services, programs, 

13 and activities, and meeting its various obligations, 

14 the effectiveness of The American National Red 

15 Cross will be promoted by the creation of an organi16 zational ombudsman who—

17 (A) will be a neutral or impartial dispute 

18 resolution practitioner whose major function 

19 will be to provide confidential and informal as20 sistance to the many internal and external 

21 stakeholders of The American National Red 

22 Cross; 

23 (B) will report to the chief executive officer 

24 and the audit committee of the Board of Gov25 ernors; and 
7

•S 655 ES

1 (C) will have access to anyone and any 

2 documents in The American National Red 

3 Cross. 

4 (b) SENSE OF CONGRESS.—It is the sense of Con5 gress that—

6 (1) charitable organizations are an indispen7 sable part of American society, but these organiza8 tions can only fulfill their important roles by main9 taining the trust of the American public; 

10 (2) trust is fostered by effective governance and 

11 transparency, which are the principal goals of the 

12 recommendations of the Board of Governors in the 

13 Governance Report and this Act; 

14 (3) Federal and State action play an important 

15 role in ensuring effective governance and trans16 parency by setting standards, rooting out violations, 

17 and informing the public; and 

18 (4) while The American National Red Cross is 

19 and will remain a Federally chartered instrumen20 tality of the United States, and it has the rights and 

21 obligations consistent with that status, The Amer22 ican National Red Cross nevertheless should main23 tain appropriate communications with State regu24 lators of charitable organizations and should cooper-
8

•S 655 ES

1 ate with them as appropriate in specific matters as 

2 they arise from time to time. 

3 SEC. 3. ORGANIZATION. 

4 Section 300101 of title 36, United States Code, is 

5 amended—

6 (1) in subsection (a), by inserting ‘‘a Federally 

7 chartered instrumentality of the United States and’’ 

8 before ‘‘a body corporate and politic’’; and 

9 (2) in subsection (b), by inserting at the end 

10 the following new sentence: ‘‘The corporation may 

11 conduct its business and affairs, and otherwise hold 

12 itself out, as the ‘American Red Cross’ in any juris13 diction.’’. 

14 SEC. 4. PURPOSES. 

15 Section 300102 of title 36, United States Code, is 

16 amended—

17 (1) by striking ‘‘and’’ at the end of paragraph 

18 (3); 

19 (2) by striking the period at the end of para20 graph (4) and inserting ‘‘; and’’; and 

21 (3) by adding at the end the following para22 graph: 

23 ‘‘(5) to conduct other activities consistent with 

24 the foregoing purposes.’’. 
9

•S 655 ES

1 SEC. 5. MEMBERSHIP AND CHAPTERS. 

2 Section 300103 of title 36, United States Code, is 

3 amended—

4 (1) in subsection (a), by inserting ‘‘, or as oth5 erwise provided,’’ before ‘‘in the bylaws’’; 

6 (2) in subsection (b)(1)—

7 (A) by striking ‘‘board of governors’’ and 

8 inserting ‘‘corporation’’; and 

9 (B) by inserting ‘‘policies and’’ before 

10 ‘‘regulations related’’; and 

11 (3) in subsection (b)(2)—

12 (A) by inserting ‘‘policies and’’ before 

13 ‘‘regulations shall require’’; and 

14 (B) by striking ‘‘national convention’’ and 

15 inserting ‘‘annual meeting’’. 

16 SEC. 6. BOARD OF GOVERNORS. 

17 Section 300104 of title 36, United States Code, is 

18 amended to read as follows: 

19 ‘‘§ 300104. Board of governors 

20 ‘‘(a) BOARD OF GOVERNORS.—

21 ‘‘(1) IN GENERAL.—The board of governors is 

22 the governing body of the corporation with all pow23 ers of governing and directing, and of overseeing the 

24 management of the business and affairs of, the cor25 poration. 
10

•S 655 ES

1 ‘‘(2) NUMBER.—The board of governors shall 

2 fix by resolution, from time to time, the number of 

3 members constituting the entire board of governors, 

4 provided that—

5 ‘‘(A) as of March 31, 2009, and thereafter, 

6 there shall be no fewer than 12 and no more 

7 than 25 members; and 

8 ‘‘(B) as of March 31, 2012, and thereafter, 

9 there shall be no fewer than 12 and no more 

10 than 20 members constituting the entire board. 

11 Procedures to implement the preceding sentence 

12 shall be provided in the bylaws. 

13 ‘‘(3) APPOINTMENT.—The governors shall be 

14 appointed or elected in the following manner: 

15 ‘‘(A) CHAIRMAN.—

16 ‘‘(i) IN GENERAL.—The board of gov17 ernors, in accordance with procedures pro18 vided in the bylaws, shall recommend to 

19 the President an individual to serve as 

20 chairman of the board of governors. If 

21 such recommendation is approved by the 

22 President, the President shall appoint such 

23 individual to serve as chairman of the 

24 board of governors. 
11

•S 655 ES

1 ‘‘(ii) VACANCIES.—Vacancies in the 

2 office of the chairman, including vacancies 

3 resulting from the resignation, death, or 

4 removal by the President of the chairman, 

5 shall be filled in the same manner de6 scribed in clause (i). 

7 ‘‘(iii) DUTIES.—The chairman shall 

8 be a member of the board of governors 

9 and, when present, shall preside at meet10 ings of the board of governors and shall 

11 have such other duties and responsibilities 

12 as may be provided in the bylaws or a res13 olution of the board of governors. 

14 ‘‘(B) OTHER MEMBERS.—

15 ‘‘(i) IN GENERAL.—Members of the 

16 board of governors other than the chair17 man shall be elected at the annual meeting 

18 of the corporation in accordance with such 

19 procedures as may be provided in the by20 laws. 

21 ‘‘(ii) VACANCIES.—Vacancies in any 

22 such elected board position and in any 

23 newly created board position may be filled 

24 by a vote of the remaining members of the 

25 board of governors in accordance with such 
12

•S 655 ES

1 procedures as may be provided in the by2 laws. 

3 ‘‘(b) TERMS OF OFFICE.—

4 ‘‘(1) IN GENERAL.—The term of office of each 

5 member of the board of governors shall be 3 years, 

6 except that—

7 ‘‘(A) the board of governors may provide 

8 under the bylaws that the terms of office of 

9 members of the board of governors elected to 

10 the board of governors before March 31, 2012, 

11 may be less than 3 years in order to implement 

12 the provisions of subparagraphs (A) and (B) of 

13 subsection (a)(2); and 

14 ‘‘(B) any member of the board of gov15 ernors elected by the board to fill a vacancy in 

16 a board position arising before the expiration of 

17 its term may, as determined by the board, serve 

18 for the remainder of that term or until the next 

19 annual meeting of the corporation. 

20 ‘‘(2) STAGGERED TERMS.—The terms of office 

21 of members of the board of governors (other than 

22 the chairman) shall be staggered such that, by 

March 31, 2012, and thereafter, 1 23 ⁄3 of the entire 

board (or as near to 1 24 ⁄3 as practicable) shall be elect25 ed at each successive annual meeting of the corpora-
13

•S 655 ES

1 tion with the term of office of each member of the 

2 board of governors elected at an annual meeting ex3 piring at the third annual meeting following the an4 nual meeting at which such member was elected. 

5 ‘‘(3) TERM LIMITS.—No person may serve as a 

6 member of the board of governors for more than 

7 such number of terms of office or years as may be 

8 provided in the bylaws. 

9 ‘‘(c) COMMITTEES AND OFFICERS.—The board—

10 ‘‘(1) may appoint, from its own members, an 

11 executive committee to exercise such powers of the 

12 board when the board is not in session as may be 

13 provided in the bylaws; 

14 ‘‘(2) may appoint such other committees or ad15 visory councils with such powers as may be provided 

16 in the bylaws or a resolution of the board of gov17 ernors; 

18 ‘‘(3) shall appoint such officers of the corpora19 tion, including a chief executive officer, with such 

20 duties, responsibilities, and terms of office as may be 

21 provided in the bylaws or a resolution of the board 

22 of governors; and 

23 ‘‘(4) may remove members of the board of gov24 ernors (other than the chairman), officers, and em-
14

•S 655 ES

1 ployees under such procedures as may be provided in 

2 the bylaws or a resolution of the board of governors. 

3 ‘‘(d) ADVISORY COUNCIL.—

4 ‘‘(1) ESTABLISHMENT.—There shall be an advi5 sory council to the board of governors. 

6 ‘‘(2) MEMBERSHIP; APPOINTMENT BY PRESI7 DENT.—

8 ‘‘(A) IN GENERAL.—The advisory council 

9 shall be composed of no fewer than 8 and no 

10 more than 10 members, each of whom shall be 

11 appointed by the President from principal offi12 cers of the executive departments and senior of13 ficers of the Armed Forces whose positions and 

14 interests qualify them to contribute to carrying 

15 out the programs and purposes of the corpora16 tion. 

17 ‘‘(B) MEMBERS FROM THE ARMED

18 FORCES.—At least 1, but not more than 3, of 

19 the members of the advisory council shall be se20 lected from the Armed Forces. 

21 ‘‘(3) DUTIES.—The advisory council shall ad22 vise, report directly to, and meet, at least 1 time per 

23 year with the board of governors, and shall have 

24 such name, functions and be subject to such proce25 dures as may be provided in the bylaws. 
15

•S 655 ES

1 ‘‘(e) ACTION WITHOUT MEETING.—Any action re2 quired or permitted to be taken at any meeting of the 

3 board of governors or of any committee thereof may be 

4 taken without a meeting if all members of the board or 

5 committee, as the case may be, consent thereto in writing, 

6 or by electronic transmission and the writing or writings 

7 or electronic transmission or transmissions are filed with 

8 the minutes of proceedings of the board or committee. 

9 Such filing shall be in paper form if the minutes are main10 tained in paper form and shall be in electronic form if 

11 the minutes are maintained in electronic form. 

12 ‘‘(f) VOTING BY PROXY.—

13 ‘‘(1) IN GENERAL.—Voting by proxy is not al14 lowed at any meeting of the board, at the annual 

15 meeting, or at any meeting of a chapter. 

16 ‘‘(2) EXCEPTION.—The board may allow the 

17 election of governors by proxy during any emer18 gency. 

19 ‘‘(g) BYLAWS.—

20 ‘‘(1) IN GENERAL.—The board of governors 

21 may—

22 ‘‘(A) at any time adopt bylaws; and 

23 ‘‘(B) at any time adopt bylaws to be effec24 tive only in an emergency. 
16

•S 655 ES

1 ‘‘(2) EMERGENCY BYLAWS.—Any bylaws adopt2 ed pursuant to paragraph (1)(B) may provide spe3 cial procedures necessary for managing the corpora4 tion during the emergency. All provisions of the reg5 ular bylaws consistent with the emergency bylaws re6 main effective during the emergency. 

7 ‘‘(h) DEFINITIONS.—For purposes of this section—

8 ‘‘(1) the term ‘entire board’ means the total 

9 number of members of the board of governors that 

10 the corporation would have if there were no vacan11 cies; and 

12 ‘‘(2) the term ‘emergency’ shall have such 

13 meaning as may be provided in the bylaws.’’. 

14 SEC. 7. POWERS. 

15 Paragraph (a)(1) of section 300105 of title 36, 

16 United States Code, is amended by striking ‘‘bylaws’’ and 

17 inserting ‘‘policies’’. 

18 SEC. 8. ANNUAL MEETING. 

19 Section 300107 of title 36, United States Code, is 

20 amended to read as follows: 

21 ‘‘§ 300107. Annual meeting 

22 ‘‘(a) IN GENERAL.—The annual meeting of the cor23 poration is the annual meeting of delegates of the chap24 ters. 
17

•S 655 ES

1 ‘‘(b) TIME OF MEETING.—The annual meeting shall 

2 be held as determined by the board of governors. 

3 ‘‘(c) PLACE OF MEETING.—The board of governors 

4 is authorized to determine that the annual meeting shall 

5 not be held at any place, but may instead be held solely 

6 by means of remote communication subject to such proce7 dures as are provided in the bylaws. 

8 ‘‘(d) VOTING.—

9 ‘‘(1) IN GENERAL.—In matters requiring a vote 

10 at the annual meeting, each chapter is entitled to at 

11 least 1 vote, and voting on all matters may be con12 ducted by mail, telephone, telegram, cablegram, elec13 tronic mail, or any other means of electronic or tele14 phone transmission, provided that the person voting 

15 shall state, or submit information from which it can 

16 be determined, that the method of voting chosen was 

17 authorized by such person. 

18 ‘‘(2) ESTABLISHMENT OF NUMBER OF

19 VOTES.—

20 ‘‘(A) IN GENERAL.—The board of gov21 ernors shall determine on an equitable basis the 

22 number of votes that each chapter is entitled to 

23 cast, taking into consideration the size of the 

24 membership of the chapters, the populations 
18

•S 655 ES

1 served by the chapters, and such other factors 

2 as may be determined by the board. 

3 ‘‘(B) PERIODIC REVIEW.—The board of 

4 governors shall review the allocation of votes at 

5 least every 5 years.’’. 

6 SEC. 9. ENDOWMENT FUND. 

7 Section 300109 of title 36, United States Code is 

8 amended—

9 (1) by striking ‘‘nine’’ from the first sentence 

10 thereof; and 

11 (2) by striking the second sentence and insert12 ing the following: ‘‘The corporation shall prescribe 

13 policies and regulations on terms and tenure of of14 fice, accountability, and expenses of the board of 

15 trustees.’’. 

16 SEC. 10. ANNUAL REPORT AND AUDIT. 

17 Subsection (a) of section 300110 of title 36, United 

18 States Code, is amended to read as follows: 

19 ‘‘(a) SUBMISSION OF REPORT.—As soon as prac20 ticable after the end of the corporation’s fiscal year, which 

21 may be changed from time to time by the board of gov22 ernors, the corporation shall submit a report to the Sec23 retary of Defense on the activities of the corporation dur24 ing such fiscal year, including a complete, itemized report 

25 of all receipts and expenditures.’’. 
19

•S 655 ES

1 SEC. 11. COMPTROLLER GENERAL OF THE UNITED STATES 

2 AND OFFICE OF THE OMBUDSMAN. 

3 (a) IN GENERAL.—Chapter 3001 of title 36, United 

4 States Code, is amended by redesignating section 300111 

5 as section 300113 and by inserting after section 300110 

6 the following new sections: 

7 ‘‘§ 300111. Authority of the Comptroller General of 

8 the United States 

9 ‘‘The Comptroller General of the United States is au10 thorized to review the corporation’s involvement in any 

11 Federal program or activity the Government carries out 

12 under law. 

13 ‘‘§ 300112. Office of the Ombudsman 

14 ‘‘(a) ESTABLISHMENT.—The corporation shall estab15 lish an Office of the Ombudsman with such duties and 

16 responsibilities as may be provided in the bylaws or a reso17 lution of the board of governors.’’

18 ‘‘(b) REPORT.—

19 ‘‘(1) IN GENERAL.—The Office of the Ombuds20 man shall submit annually to the appropriate Con21 gressional committees a report concerning any 

22 trends and systemic matters that the Office of the 

23 Ombudsman has identified as confronting the cor24 poration. 

25 ‘‘(2) APPROPRIATE CONGRESSIONAL COMMIT26 TEES.—For purposes of paragraph (1), the appro-
20

•S 655 ES

1 priate Congressional committees are the following 

2 committees of Congress: 

3 ‘‘(A) SENATE COMMITTEES.—The appro4 priate Congressional committees of the Senate 

5 are—

6 ‘‘(i) the Committee on Finance; 

7 ‘‘(ii) the Committee on Foreign Rela8 tions; 

9 ‘‘(iii) the Committee on Health, Edu10 cation, Labor, and Pensions; 

11 ‘‘(iv) the Committee on Homeland Se12 curity and Governmental Affairs; and 

13 ‘‘(v) the Committee on the Judiciary. 

14 ‘‘(B) HOUSE COMMITTEES.—The appro15 priate Congressional committees of the House 

16 of Representatives are—

17 ‘‘(i) the Committee on Energy and 

18 Commerce; 

19 ‘‘(ii) the Committee on Foreign Af20 fairs; 

21 ‘‘(iii) the Committee on Homeland Se22 curity; 

23 ‘‘(iv) the Committee on the Judiciary; 

24 and 
21

•S 655 ES

1 ‘‘(v) the Committee on Ways and 

2 Means.’’. 

3 (b) CLERICAL AMENDMENT.—The table of sections 

4 for chapter 3001 of title 36, United States Code, is 

5 amended by striking the item relating to section 300111 

6 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 Amertury, and for other purposes. American National Red Cross in the 21st cen- Red Cross to support the critical mission of The board of governors of The American National ance structure, to enhance the ability of the ican National Red Cross to modernize its govern-