1. Can the chairman of a nonprofit board have the authority to veto any motions? If the majority of the board votes for something the chairman opposes, it is legal if the by-laws provide that the chairman has the power to veto? 2. The same organization’s by-laws say that 10% is needed for a quorum to hold a meeting or approve a transaction. So if there are 10 members and one shows up, has the 10% has been met? 3. This same organization’s by-laws provide that the position of the executive director is perpetual, basically saying that the individual can never be replaced unless the individual resigns.
These questions are all a matter of state law, but I suspect that each of these provisions would be legal—although not necessarily wise. Bylaws function as a contract among the participants of a nonprofit organization, and although state nonprofit corporation laws usually provide default provisions for governance procedures, in most cases the rules can be modified with the consent of the participants.
It is highly unusual to give a board chair a veto power over board decisions the chair does not approve. It is normally possible to classify directors and require a majority of each class to approve an action, which may be a great safety device when the board represents very different but important constituencies. But this sounds as though all power is centralized in one person, which will significantly reduce the interest and participation of the others. Even in our sole member corporations protecting the founder of a new nonprofit, we provide for a real board, with full power and authority (and fiduciary duty) to run the organization. (See Ready Reference Page: “Sole Member Bylaws Can Protect Founder of Nonprofit”)
On the quorum question, I assume you are talking about voting members, not voting directors. A quorum requirement for membership organizations should reflect the likelihood of participation and the importance of the role of members. We have written membership quorum provisions saying that whoever shows up constitutes a quorum. In those organizations, the members are not expected to be actively participating in the governance of the organization, and it is highly unlikely that a majority would ever attend a meeting. In this organization, if the chair has veto power over board decisions, it isn’t likely that the members are expected to have much power or influence in the organization. (See Ready Reference Page: "Bylaws Function as ‘Constitution’ of Nonprofit Corporations”)
It is highly unusual, and definitely not a good idea, to have a chief executive for life. In our sole member corporations, we do not require that the sole member be kept as president or as any other officer if the board wants to make a change.
This organization looks like it is headed for trouble.
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