I 
110TH CONGRESS 
1ST SESSION H. R. 1681 
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 
MARCH 26, 2007 
Mr. LANTOS (for himself, Ms. ROS-LEHTINEN, Mr. FLAKE, Ms. JACKSON-LEE 
of Texas, Mr. WEXLER, Mr. ACKERMAN, Mr. SIRES, and Mr. SCOTT of 
Georgia) introduced the following bill; which was referred to the Com-
mittee on Foreign Affairs 
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 ‘‘American National 
Red Cross Governance Modernization Act of 2007’’. 
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SEC. 2. FINDINGS; SENSE OF CONGRESS. 
(a) FINDINGS.—Congress makes the following find-
ings: 
(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. 
(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 
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Governors’ ability to support the critical mission of 
The American National Red Cross in the 21st cen-
tury. 
(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 Na-
tional Red Cross to amend its bylaws, consistent 
with the recommendations described in the Govern-
ance Report, to clarify the role of the Board of Gov-
ernors 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 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-
ship team and providing for management suc-
cession; 
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(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)(A) The selection of members of the Board 
of Governors is a critical component of effective gov-
ernance for The American National Red Cross, and, 
as such, it is in the national interest that The Amer-
ican 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 
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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 con-
sidered for approval by the full Board of Gov-
ernors and then submitted to The American 
National Red Cross annual meeting of delegates 
for election, in keeping with the standard cor-
porate practice whereby shareholders of a cor-
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poration 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 instrumen-
tality 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 organi-
zational ombudsman who— 
(A) will be a neutral or impartial dispute 
resolution practitioner whose major function 
will be to provide confidential and informal as-
sistance 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 Gov-
ernors; and 
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(C) will have access to anyone and any 
documents in The American National Red 
Cross. 
(b) SENSE OF CONGRESS.—It is the sense of Con-
gress that— 
(1) 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; 
(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 trans-
parency 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 obli-
gations consistent with that status, The American 
National Red Cross nevertheless should maintain ap-
propriate communications with State regulators of 
charitable organizations and should cooperate with 
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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 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.’’. 
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SEC. 5. MEMBERSHIP AND CHAPTERS. 
Section 300103 of title 36, United States Code, is 
amended— 
(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. 
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‘‘(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 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. 
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‘‘(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 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 
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procedures as may be provided in the by-
laws. 
‘‘(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 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-
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tion with the term of office of each member of the 
board of governors elected at an annual meeting ex-
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-
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ployees 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 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. 
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‘‘(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 
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. 
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