I 
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 Na-
tional 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 Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘The American Na-
tional Red Cross Governance Modernization Act of 2006’’. 
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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, com-
position, size, relationship with management, govern-
ance relationship with chartered units of The Amer-
ican National Red Cross, and whistleblower and 
audit functions. 
(3) In an October 2006 report of the Board of 
Governors, entitled ‘‘American Red Cross Govern-
ance for the 21st Century’’ (the ‘‘Governance Re-
port’’), the Board of Governors recommended 
changes to the Congressional Charter, bylaws, and 
other governing documents of The American Na-
tional Red Cross to modernize and enhance the ef-
fectiveness of the Board of Governors and govern-
ance structure of The American National Red Cross. 
Recommendations from the Governance Report call-
ing for amendments to the Congressional Charter 
are set forth in this legislation. 
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(4) This legislation seeks to create a more effi-
cient governance structure of The American Na-
tional Red Cross and to enhance the Board of Gov-
ernors’ 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 Gov-
ernance Report to clarify further the role of the 
Board of Governors and to outline areas of its re-
sponsibility, including— 
(A) reviewing and approving the mission 
statement for The American National Red 
Cross; 
(B) approving and overseeing the corpora-
tion’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 estab-
lishing the compensation of the senior leader-
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ship team and providing for management suc-
cession; 
(E) overseeing the financial reporting and 
audit process, internal controls, and legal com-
pliance; 
(F) holding management accountable for 
performance; 
(G) providing oversight of the financial 
stability of the corporation; 
(H) ensuring the inclusiveness and diver-
sity 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 gov-
ernance for The American National Red Cross. As 
the Governance Report contemplates, The American 
National Red Cross is expected to implement amend-
ments to its bylaws to provide a method of selection 
consistent with that described in the Governance Re-
port. The new method of selection would replace the 
current process by which— 
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(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 Gov-
ernance Report reflects the single category of mem-
bers 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 com-
mittee of the Board of Governors taking into ac-
count 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 Gov-
ernors and then submitted to The American Na-
tional Red Cross annual meeting of delegates for 
election, in keeping with the standard corporate 
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practice whereby shareholders of a corporation elect 
members of a board of directors at its annual meet-
ing. 
(7) The United States Supreme Court held The 
American National Red Cross to be an instrumen-
tality of the United States. The changes to the Con-
gressional 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 ac-
knowledges 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 stake-
holders of The American National Red Cross. The 
American National Red Cross ombudsman will re-
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port to the chief executive officer and the audit com-
mittee of the Board of Governors and will have ac-
cess to anyone and any documents in The American 
National Red Cross. 
(9) Charitable organizations are an indispen-
sable part of American society, but these organiza-
tions can only fulfill their important roles by main-
taining the trust of the American public. This trust 
is fostered by effective governance and transparency, 
which are the principal goals of the recommenda-
tions 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 Amer-
ican National Red Cross is and will remain a Feder-
ally 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 appro-
priate communications with State regulators of char-
itable organizations and to cooperate with them as 
appropriate in specific matters as they arise from 
time to time. 
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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 juris-
diction.’’. 
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 para-
graph (4) and inserting ‘‘; and’’; and 
(3) by adding at the end the following para-
graph: 
‘‘(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— 
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(1) in subsection (a), by inserting ‘‘, or as oth-
erwise 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: 
‘‘§ 300104. Board of governors 
‘‘(a) BOARD OF GOVERNORS.— 
‘‘(1) IN GENERAL.—The board of governors is 
the governing body of the corporation with all pow-
ers of governing and directing, and of overseeing the 
management of the business and affairs of, the cor-
poration. 
‘‘(2) NUMBER.—The board of governors shall 
fix by resolution, from time to time, the number of 
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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 gov-
ernors, in accordance with procedures pro-
vided 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 
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removal by the President of the chairman, 
shall be filled in the same manner de-
scribed in clause (i). 
‘‘(iii) DUTIES.—The chairman shall 
be a member of the board of governors 
and, when present, shall preside at meet-
ings of the board of governors and shall 
have such other duties and responsibilities 
as may be provided in the bylaws or a res-
olution of the board of governors. 
‘‘(B) OTHER MEMBERS.— 
‘‘(i) IN
GENERAL.—Members of the 
board of governors other than the chair-
man shall be elected at the annual meeting 
of the corporation in accordance with such 
procedures as may be provided in the by-
laws. 
‘‘(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 by-
laws. 
‘‘(b) TERMS OF OFFICE.— 
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‘‘(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 gov-
ernors 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 elect-
ed at each successive annual meeting of the corpora-
tion with the term of office of each member of the 
board of governors elected at an annual meeting ex-
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piring at the third annual meeting following the an-
nual 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 ad-
visory councils with such powers as may be provided 
in the bylaws or a resolution of the board of gov-
ernors; 
‘‘(3) shall appoint such officers of the corpora-
tion, 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 gov-
ernors (other than the chairman), officers, and em-
ployees under such procedures as may be provided in 
the bylaws or a resolution of the board of governors. 
‘‘(d) ADVISORY COUNCIL.— 
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‘‘(1) ESTABLISHMENT.—There shall be an advi-
sory council to the board of governors. 
‘‘(2) MEMBERSHIP; APPOINTMENT
BY
PRESI-
DENT.— 
‘‘(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 offi-
cers of the executive departments and senior of-
ficers of the Armed Forces whose positions and 
interests qualify them to contribute to carrying 
out the programs and purposes of the corpora-
tion. 
‘‘(B) 
MEMBERS
FROM
THE
ARMED 
FORCES.—At least 1, but not more than 3, of 
the members of the advisory council shall be se-
lected from the Armed Forces. 
‘‘(3) DUTIES.—The advisory council shall ad-
vise, 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 proce-
dures as may be provided in the bylaws. 
‘‘(e) ACTION WITHOUT MEETING.—Any action re-
quired or permitted to be taken at any meeting of the 
board of governors or of any committee thereof may be 
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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 main-
tained 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 al-
lowed 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 emer-
gency. 
‘‘(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 effec-
tive only in an emergency. 
‘‘(2) EMERGENCY BYLAWS.—Any bylaws adopt-
ed pursuant to paragraph (1)(B) may provide spe-
cial procedures necessary for managing the corpora-
tion during the emergency. All provisions of the reg-
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ular bylaws consistent with the emergency bylaws re-
main 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 vacan-
cies; 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: 
‘‘§ 300107. Annual meeting 
‘‘(a) IN GENERAL.—The annual meeting of the cor-
poration is the annual meeting of delegates of the chap-
ters. 
‘‘(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 
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by means of remote communication subject to such proce-
dures 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 con-
ducted by mail, telephone, telegram, cablegram, elec-
tronic mail, or any other means of electronic or tele-
phone 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 gov-
ernors 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.’’. 
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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 insert-
ing the following: ‘‘The corporation shall prescribe 
policies and regulations on terms and tenure of of-
fice, 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 prac-
ticable after the end of the corporation’s fiscal year, which 
may be changed from time to time by the board of gov-
ernors, the corporation shall submit a report to the Sec-
retary of Defense on the activities of the corporation dur-
ing 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: 
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‘‘§ 300111. Authority of the Comptroller General of 
the United States 
‘‘The Comptroller General of the United States is au-
thorized to review the corporation’s involvement in any 
Federal program or activity the Government carries out 
under law. 
‘‘§ 300112. Office of the Ombudsman 
‘‘(a) ESTABLISHMENT.—The corporation shall estab-
lish an Office of the Ombudsman with such duties and 
responsibilities as may be provided in the bylaws or a reso-
lution 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 Om-
budsman 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.’’. 
Æ 
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