110TH CONGRESS 

1ST SESSION H. R. 1681

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.
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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’’. 

6 SEC. 2. FINDINGS; SENSE OF CONGRESS. 

7 (a) FINDINGS.—Congress makes the following find8 ings: 

9 (1) Substantive changes to the Congressional 

10 Charter of The American National Red Cross have 

11 not been made since 1947. 

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

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

14 Governors’’) commissioned an independent review 

15 and analysis of the Board of Governors’ role, com16 position, size, relationship with management, govern17 ance relationship with chartered units of The Amer18 ican National Red Cross, and whistleblower and 

19 audit functions. 

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

21 Governors, entitled ‘‘American Red Cross Govern22 ance for the 21st Century’’ (the ‘‘Governance Re23 port’’), the Board of Governors recommended 

24 changes to the Congressional Charter, bylaws, and 

25 other governing documents of The American Na-
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1 tional Red Cross to modernize and enhance the ef2 fectiveness of the Board of Governors and govern3 ance structure of The American National Red Cross. 

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

5 more efficient governance structure of The American 

6 National Red Cross and to enhance the Board of 

7 Governors’ ability to support the critical mission of 

8 The American National Red Cross in the 21st cen9 tury. 

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

11 role of the Board of Governors as a governance and 

12 strategic oversight board and for The American Na13 tional Red Cross to amend its bylaws, consistent 

14 with the recommendations described in the Govern15 ance Report, to clarify the role of the Board of Gov16 ernors and to outline the areas of its responsibility, 

17 including—

18 (A) reviewing and approving the mission 

19 statement for The American National Red 

20 Cross; 

21 (B) approving and overseeing the corpora22 tion’s strategic plan and maintaining strategic 

23 oversight of operational matters; 
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1 (C) selecting, evaluating, and determining 

2 the level of compensation of the corporation’s 

3 chief executive officer; 

4 (D) evaluating the performance and estab5 lishing the compensation of the senior leader6 ship team and providing for management suc7 cession; 

8 (E) overseeing the financial reporting and 

9 audit process, internal controls, and legal com10 pliance; 

11 (F) holding management accountable for 

12 performance; 

13 (G) providing oversight of the financial 

14 stability of the corporation; 

15 (H) ensuring the inclusiveness and diver16 sity of the corporation; 

17 (I) ensuring the chapters of the corpora18 tion are geographically and regionally diverse; 

19 (J) providing oversight of the protection of 

20 the brand of the corporation; and 

21 (K) assisting with fundraising on behalf of 

22 the corporation. 

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

24 of Governors is a critical component of effective gov25 ernance for The American National Red Cross, and, 
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1 as such, it is in the national interest that The Amer2 ican National Red Cross amend its bylaws to provide 

3 a method of selection consistent with that described 

4 in the Governance Report. 

5 (B) The new method of selection should replace 

6 the current process by which—

7 (i) 30 chartered unit-elected members of 

8 the Board of Governors are selected by a non9 Board committee which includes 2 members of 

10 the Board of Governors and other individuals 

11 elected by the chartered units themselves; 

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

13 Governors are nominated by a Board committee 

14 and elected by the Board of Governors; and 

15 (iii) 8 members of the Board of Governors 

16 are appointed by the President of the United 

17 States. 

18 (C) The new method of selection described in 

19 the Governance Report reflects the single category of 

20 members of the Board of Governors that will result 

21 from the implementation of this Act: 

22 (i) All Board members (except for the 

23 chairman of the Board of Governors) would be 

24 nominated by a single committee of the Board 

25 of Governors taking into account the criteria 
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1 outlined in the Governance Report to assure the 

2 expertise, skills, and experience of a governing 

3 board. 

4 (ii) The nominated members would be con5 sidered for approval by the full Board of Gov6 ernors and then submitted to The American 

7 National Red Cross annual meeting of delegates 

8 for election, in keeping with the standard cor9 porate practice whereby shareholders of a cor10 poration elect members of a board of directors 

11 at its annual meeting. 

12 (7) The United States Supreme Court held The 

13 American National Red Cross to be an instrumen14 tality of the United States, and it is in the national 

15 interest that the Congressional Charter confirm that 

16 status and that any changes to the Congressional 

17 Charter do not affect the rights and obligations of 

18 The American National Red Cross to carry out its 

19 purposes. 

20 (8) Given the role of The American National 

21 Red Cross in carrying out its services, programs, 

22 and activities, and meeting its various obligations, 

23 the effectiveness of The American National Red 

24 Cross will be promoted by the creation of an organi25 zational ombudsman who—
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1 (A) will be a neutral or impartial dispute 

2 resolution practitioner whose major function 

3 will be to provide confidential and informal as4 sistance to the many internal and external 

5 stakeholders of The American National Red 

6 Cross; 

7 (B) will report to the chief executive officer 

8 and the audit committee of the Board of Gov9 ernors; and 

10 (C) will have access to anyone and any 

11 documents in The American National Red 

12 Cross. 

13 (b) SENSE OF CONGRESS.—It is the sense of Con14 gress that—

15 (1) charitable organizations are an indispen16 sable part of American society, but these organiza17 tions can only fulfill their important roles by main18 taining the trust of the American public; 

19 (2) trust is fostered by effective governance and 

20 transparency, which are the principal goals of the 

21 recommendations of the Board of Governors in the 

22 Governance Report and this Act; 

23 (3) Federal and State action play an important 

24 role in ensuring effective governance and trans-
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1 parency by setting standards, rooting out violations, 

2 and informing the public; 

3 (4) while The American National Red Cross is 

4 and will remain a Federally chartered instrumen5 tality of the United States, and it has the rights and 

6 obligations consistent with that status, The Amer7 ican National Red Cross nevertheless should main8 tain appropriate communications with State regu9 lators of charitable organizations and should cooper10 ate with them as appropriate in specific matters as 

11 they arise from time to time; and 

12 (5) while The American National Red Cross is 

13 and will remain a Federally chartered instrumen14 tality of the United States, and it has the rights and 

15 obligations consistent with that status, The Amer16 ican National Red Cross nevertheless should main17 tain appropriate communications and collaborations 

18 with local, community, and faith-based non-profit or19 ganizations, including those organizations that work 

20 within minority communities. 

21 SEC. 3. ORGANIZATION. 

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

23 amended—
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1 (1) in subsection (a), by inserting ‘‘a Federally 

2 chartered instrumentality of the United States and’’ 

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

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

5 the following new sentence: ‘‘The corporation may 

6 conduct its business and affairs, and otherwise hold 

7 itself out, as the ‘American Red Cross’ in any juris8 diction.’’. 

9 SEC. 4. PURPOSES. 

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

11 amended—

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

13 (3); 

14 (2) by striking the period at the end of para15 graph (4) and inserting ‘‘; and’’; and 

16 (3) by adding at the end the following para17 graph: 

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

19 the foregoing purposes.’’. 

20 SEC. 5. MEMBERSHIP AND CHAPTERS. 

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

22 amended—

23 (1) in subsection (a), by inserting ‘‘, or as oth24 erwise provided,’’ before ‘‘in the bylaws’’; 

25 (2) in subsection (b)(1)—
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1 (A) by striking ‘‘board of governors’’ and 

2 inserting ‘‘corporation’’; and 

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

4 ‘‘regulations related’’; and 

5 (3) in subsection (b)(2)—

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

7 ‘‘regulations shall require’’; and 

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

9 inserting ‘‘annual meeting’’. 

10 SEC. 6. BOARD OF GOVERNORS. 

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

12 amended to read as follows: 

13 ‘‘§ 300104. Board of governors 

14 ‘‘(a) BOARD OF GOVERNORS.—

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

16 the governing body of the corporation with all pow17 ers of governing and directing, and of overseeing the 

18 management of the business and affairs of, the cor19 poration. 

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

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

22 members constituting the entire board of governors, 

23 provided that—
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1 ‘‘(A) as of March 31, 2009, and thereafter, 

2 there shall be no fewer than 12 and no more 

3 than 25 members; and 

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

5 there shall be no fewer than 12 and no more 

6 than 20 members constituting the entire board. 

7 Procedures to implement the preceding sentence 

8 shall be provided in the bylaws. 

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

10 appointed or elected in the following manner: 

11 ‘‘(A) CHAIRMAN.—

12 ‘‘(i) IN GENERAL.—The board of gov13 ernors, in accordance with procedures pro14 vided in the bylaws, shall recommend to 

15 the President an individual to serve as 

16 chairman of the board of governors. If 

17 such recommendation is approved by the 

18 President, the President shall appoint such 

19 individual to serve as chairman of the 

20 board of governors. 

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

22 office of the chairman, including vacancies 

23 resulting from the resignation, death, or 

24 removal by the President of the chairman, 
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1 shall be filled in the same manner de2 scribed in clause (i). 

3 ‘‘(iii) DUTIES.—The chairman shall 

4 be a member of the board of governors 

5 and, when present, shall preside at meet6 ings of the board of governors and shall 

7 have such other duties and responsibilities 

8 as may be provided in the bylaws or a res9 olution of the board of governors. 

10 ‘‘(B) OTHER MEMBERS.—

11 ‘‘(i) IN GENERAL.—Members of the 

12 board of governors other than the chair13 man shall be elected at the annual meeting 

14 of the corporation in accordance with such 

15 procedures as may be provided in the by16 laws. 

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

18 such elected board position and in any 

19 newly created board position may be filled 

20 by a vote of the remaining members of the 

21 board of governors in accordance with such 

22 procedures as may be provided in the by23 laws. 

24 ‘‘(b) TERMS OF OFFICE.—
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1 ‘‘(1) IN GENERAL.—The term of office of each 

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

3 except that—

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

5 under the bylaws that the terms of office of 

6 members of the board of governors elected to 

7 the board of governors before March 31, 2012, 

8 may be less than 3 years in order to implement 

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

10 subsection (a)(2); and 

11 ‘‘(B) any member of the board of gov12 ernors elected by the board to fill a vacancy in 

13 a board position arising before the expiration of 

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

15 for the remainder of that term or until the next 

16 annual meeting of the corporation. 

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

18 of members of the board of governors (other than 

19 the chairman) shall be staggered such that, by 

March 31, 2012, and thereafter, 1 20 ⁄3 of the entire 

board (or as near to 1 21 ⁄3 as practicable) shall be elect22 ed at each successive annual meeting of the corpora23 tion with the term of office of each member of the 

24 board of governors elected at an annual meeting ex-
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1 piring at the third annual meeting following the an2 nual meeting at which such member was elected. 

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

4 member of the board of governors for more than 

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

6 provided in the bylaws. 

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

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

9 executive committee to exercise such powers of the 

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

11 provided in the bylaws; 

12 ‘‘(2) may appoint such other committees or ad13 visory councils with such powers as may be provided 

14 in the bylaws or a resolution of the board of gov15 ernors; 

16 ‘‘(3) shall appoint such officers of the corpora17 tion, including a chief executive officer, with such 

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

19 provided in the bylaws or a resolution of the board 

20 of governors; and 

21 ‘‘(4) may remove members of the board of gov22 ernors (other than the chairman), officers, and em23 ployees under such procedures as may be provided in 

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

25 ‘‘(d) ADVISORY COUNCIL.—
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1 ‘‘(1) ESTABLISHMENT.—There shall be an advi2 sory council to the board of governors. 

3 ‘‘(2) MEMBERSHIP; APPOINTMENT BY PRESI4 DENT.—

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

6 shall be composed of no fewer than 8 and no 

7 more than 10 members, each of whom shall be 

8 appointed by the President from principal offi9 cers of the executive departments and senior of10 ficers of the Armed Forces whose positions and 

11 interests qualify them to contribute to carrying 

12 out the programs and purposes of the corpora13 tion. 

14 ‘‘(B) MEMBERS FROM THE ARMED

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

16 the members of the advisory council shall be se17 lected from the Armed Forces. 

18 ‘‘(3) DUTIES.—The advisory council shall ad19 vise, report directly to, and meet, at least 1 time per 

20 year with the board of governors, and shall have 

21 such name, functions and be subject to such proce22 dures as may be provided in the bylaws. 

23 ‘‘(e) ACTION WITHOUT MEETING.—Any action re24 quired or permitted to be taken at any meeting of the 

25 board of governors or of any committee thereof may be 
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1 taken without a meeting if all members of the board or 

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

3 or by electronic transmission and the writing or writings 

4 or electronic transmission or transmissions are filed with 

5 the minutes of proceedings of the board or committee. 

6 Such filing shall be in paper form if the minutes are main7 tained in paper form and shall be in electronic form if 

8 the minutes are maintained in electronic form. 

9 ‘‘(f) VOTING BY PROXY.—

10 ‘‘(1) IN GENERAL.—Voting by proxy is not al11 lowed at any meeting of the board, at the annual 

12 meeting, or at any meeting of a chapter. 

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

14 election of governors by proxy during any emer15 gency. 

16 ‘‘(g) BYLAWS.—

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

18 may—

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

20 ‘‘(B) at any time adopt bylaws to be effec21 tive only in an emergency. 

22 ‘‘(2) EMERGENCY BYLAWS.—Any bylaws adopt23 ed pursuant to paragraph (1)(B) may provide spe24 cial procedures necessary for managing the corpora25 tion during the emergency. All provisions of the reg-
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1 ular bylaws consistent with the emergency bylaws re2 main effective during the emergency. 

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

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

5 number of members of the board of governors that 

6 the corporation would have if there were no vacan7 cies; and 

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

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

10 SEC. 7. POWERS. 

11 Subsection (a)(1) of section 300105 of title 36, 

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

13 inserting ‘‘policies’’. 

14 SEC. 8. ANNUAL MEETING. 

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

16 amended to read as follows: 

17 ‘‘§ 300107. Annual meeting 

18 ‘‘(a) IN GENERAL.—The annual meeting of the cor19 poration is the annual meeting of delegates of the chap20 ters. 

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

22 be held as determined by the board of governors. 

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

24 is authorized to determine that the annual meeting shall 

25 not be held at any place, but may instead be held solely 
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1 by means of remote communication subject to such proce2 dures as are provided in the bylaws. 

3 ‘‘(d) VOTING.—

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

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

6 least 1 vote, and voting on all matters may be con7 ducted by mail, telephone, telegram, cablegram, elec8 tronic mail, or any other means of electronic or tele9 phone transmission, provided that the person voting 

10 shall state, or submit information from which it can 

11 be determined, that the method of voting chosen was 

12 authorized by such person. 

13 ‘‘(2) ESTABLISHMENT OF NUMBER OF

14 VOTES.—

15 ‘‘(A) IN GENERAL.—The board of gov16 ernors shall determine on an equitable basis the 

17 number of votes that each chapter is entitled to 

18 cast, taking into consideration the size of the 

19 membership of the chapters, the populations 

20 served by the chapters, and such other factors 

21 as may be determined by the board. 

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

23 governors shall review the allocation of votes at 

24 least every 5 years.’’. 
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1 SEC. 9. ENDOWMENT FUND. 

2 Section 300109 of title 36, United States Code is 

3 amended—

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

5 thereof; and 

6 (2) by striking the second sentence and insert7 ing the following: ‘‘The corporation shall prescribe 

8 policies and regulations on terms and tenure of of9 fice, accountability, and expenses of the board of 

10 trustees.’’. 

11 SEC. 10. ANNUAL REPORT AND AUDIT. 

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

13 States Code, is amended to read as follows: 

14 ‘‘(a) SUBMISSION OF REPORT.—As soon as prac15 ticable after the end of the corporation’s fiscal year, which 

16 may be changed from time to time by the board of gov17 ernors, the corporation shall submit a report to the Sec18 retary of Defense on the activities of the corporation dur19 ing such fiscal year, including a complete, itemized report 

20 of all receipts and expenditures.’’. 

21 SEC. 11. COMPTROLLER GENERAL OF THE UNITED STATES 

22 AND OFFICE OF THE OMBUDSMAN. 

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

24 States Code, is amended by redesignating section 300111 

25 as section 300113 and by inserting after section 300110 

26 the following new sections: 
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1 ‘‘§ 300111. Authority of the Comptroller General of 

2 the United States 

3 ‘‘The Comptroller General of the United States is au4 thorized to review the corporation’s involvement in any 

5 Federal program or activity the Government carries out 

6 under law. 

7 ‘‘§ 300112. Office of the Ombudsman 

8 ‘‘(a) ESTABLISHMENT.—The corporation shall estab9 lish an Office of the Ombudsman with such duties and 

10 responsibilities as may be provided in the bylaws or a reso11 lution of the board of governors. 

12 ‘‘(b) REPORT.—

13 ‘‘(1) IN GENERAL.—The Office of the Ombuds14 man shall submit annually to the appropriate Con15 gressional committees a report concerning any 

16 trends and systemic matters that the Office of the 

17 Ombudsman has identified as confronting the cor18 poration. 

19 ‘‘(2) APPROPRIATE CONGRESSIONAL COMMIT20 TEES.—For purposes of paragraph (1), the appro21 priate Congressional committees are the following 

22 committees of Congress: 

23 ‘‘(A) SENATE COMMITTEES.—The appro24 priate Congressional committees of the Senate 

25 are—

26 ‘‘(i) the Committee on Finance; 
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1 ‘‘(ii) the Committee on Foreign Rela2 tions; 

3 ‘‘(iii) the Committee on Health, Edu4 cation, Labor, and Pensions; 

5 ‘‘(iv) the Committee on Homeland Se6 curity and Governmental Affairs; and 

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

8 ‘‘(B) HOUSE COMMITTEES.—The appro9 priate Congressional committees of the House 

10 of Representatives are—

11 ‘‘(i) the Committee on Energy and 

12 Commerce; 

13 ‘‘(ii) the Committee on Foreign Af14 fairs; 

15 ‘‘(iii) the Committee on Homeland Se16 curity; 

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

18 and 

19 ‘‘(v) the Committee on Ways and 

20 Means.’’. 

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

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

23 amended by striking the item relating to section 300111 

24 and inserting the following:

‘‘300111. Authority of the Comptroller General of the United States. 
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‘‘300112. Office of the Ombudsman. 

‘‘300113. Reservation of right to amend or repeal.’’.

Passed the House of Representatives April 17, 2007. 

Attest:

Clerk. 

110TH CONGRESS 

1ST SESSION H. R. 1681

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-