Updated: January 23, 2020
Bylaw or Policy: Which is it?
Bylaw or policy? It is surprising how many boards of directors fight about whether something is a bylaw or a policy. Determining which it should be is not that difficult. The answer is usually apparent if you consider the different purposes of bylaw and policies.
Bylaws are the primary governance document of your organization. They are a snapshot of the topmost internal management principles of your organization. They tend to address static, “boilerplate” topics., such as membership categories, dues, committees, and voting. While the board of directors can amend bylwas at any time, they are intended to remain in place for the foreseeable future. In other words, they have a sense of permenance.
Policies are flexible and take into account current regulatory, ethical, competitive, and social norms. In other words, topics and rules that can change are better suited for policies rather than bylaws. For example, policies ususally address personnel matters, organizational charts, operational matters, safety procedures, and codes of conduct. These are topics that are likely change as your business grows, expands, or industry standards change. Policies are the procedural and managerial functions that are usually more detailed and concern narrow, issue-specific matters.
To summarize, if the matter should be etched in the proverbial stone, it is probably a bylaw. If it is likely to change as business practices, technology, and laws evolve, it should probably be a policy.