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75-522: USBA was founded in 1959 to meet the needs of active duty military personnel, who at that time wanted to supplement their SGLI $ 10,000 benefit and had difficulty finding adequate life insurance coverage that would cover combat-related deaths. USBA was one of the first to eliminate the so-called “war clause” from all of its coverage. Over the years USBA expanded to offer those same insurance products and services to active reserves, National Guard, Federal Employees, honorably discharged veterans, and others. USBA

150-403: A government agency . The powers, duties, and responsibilities of a board of directors are determined by government regulations (including the jurisdiction's corporate law ) and the organization's own constitution and by-laws . These authorities may specify the number of members of the board, how they are to be chosen, and how often they are to meet. In an organization with voting members,

225-441: A quorum must be present before any business may be conducted. Usually, a meeting which is held without notice having been given is still valid if all of the directors attend, but it has been held that a failure to give notice may negate resolutions passed at a meeting, because the persuasive oratory of a minority of directors might have persuaded the majority to change their minds and vote otherwise. In most common law countries,

300-442: A board is not a career unto itself. For major corporations, the board members are usually professionals or leaders in their field. In the case of outside directors, they are often senior leaders of other organizations. Nevertheless, board members often receive remunerations amounting to hundreds of thousands of dollars per year since they often sit on the boards of several companies. Inside directors are usually not paid for sitting on

375-515: A board, but the duty is instead considered part of their larger job description. Outside directors are usually paid for their services. These remunerations vary between corporations, but usually consist of a yearly or monthly salary, additional compensation for each meeting attended, stock options, and various other benefits. such as travel, hotel and meal expenses for the board meetings. Tiffany & Co. , for example, pays directors an annual retainer of $ 46,500, an additional annual retainer of $ 2,500 if

450-480: A board, sometimes called the board process , includes the selection of board members, the setting of clear board objectives, the dissemination of documents or board package to the board members, the collaborative creation of an agenda for the meeting, the creation and follow-up of assigned action items , and the assessment of the board process through standardized assessments of board members, owners, and CEOs. The science of this process has been slow to develop due to

525-427: A certain area. The main difference between a by-law and a law passed by a national/federal or regional/state body is that a by-law is made by a non-sovereign body, which derives its authority from another governing body, and can only be made on a limited range of matters. A local council or municipal government derives its power to pass laws through a law of the national or regional government which specifies what things

600-432: A certain cause, a board of directors may have the responsibility of running the organization in between meetings of the membership, especially if the membership meets infrequently, such as only at an annual general meeting . The amount of powers and authority delegated to the board depend on the bylaws and rules of the particular organization. Some organizations place matters exclusively in the board's control while in others,

675-428: A corporation's founders or directors under the authority of its charter or articles of incorporation . By-laws widely vary from organization to organization, but generally cover topics such as the purpose of the organization, who are its members, how directors are elected, how meetings are conducted, and what officers the organization will have and a description of their duties. A common mnemonic device for remembering

750-480: A domestic market only, the presence of CEOs from global multinational corporations as outside directors can help to provide insights on export and import opportunities and international trade options. One of the arguments for having outside directors is that they can keep a watchful eye on the inside directors and on the way the organization is run. Outside directors are unlikely to tolerate "insider dealing" between inside directors, as outside directors do not benefit from

825-407: A form of delegated legislation. In Australian Law there are five types of by-law, and they are established by statute: Corporate and organizational by-laws regulate only the organization to which they apply and are generally concerned with the operation of the organization, setting out the form, manner, or procedure in which a company or organisation should be run. Corporate by-laws are drafted by

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900-529: A generous " golden parachute " which also acts as a deterrent to removal. A 2010 study examined how corporate shareholders voted in director elections in the United States. It found that directors received fewer votes from shareholders when their companies performed poorly, had excess CEO compensation, or had poor shareholder protection. Also, directors received fewer votes when they did not regularly attend board meetings or received negative recommendations from

975-486: A hospital stay. USBA members have access to additional special offers from Affinity Partners such as group auto insurance discounts from MetLife Auto & Home, ID Theft Assist, Emergency Assistance Plus (EA+) travel emergency assistance services, Life Line Screening , Hertz rental car discounts, and Long Term Care Insurance . USBA provides a free online Military Jobs Resource Center for its members and non-members to assist military personnel with their transition from

1050-483: A legislature or some other government body, establishes the degree of control that the by-laws may exercise. By-laws may be established by entities such as a business corporation , a neighbourhood association , or depending on the jurisdiction, a municipality . In the United Kingdom and some Commonwealth countries, the local laws established by municipalities are referred to as by ( e ) -laws because their scope

1125-512: A position on the board. Shareholder nominations can only occur at the general meeting itself or through the prohibitively expensive process of mailing out ballots separately; in May 2009 the SEC proposed a new rule allowing shareholders meeting certain criteria to add nominees to the proxy statement. In practice for publicly traded companies, the managers ( inside directors ) who are purportedly accountable to

1200-526: A position that does not carry any executive authority and represents recognition of the person's corporate governorship and performance. An inside director is a director who is also an employee, officer, chief executive, major shareholder , or someone similarly connected to the organization. Inside directors represent the interests of the entity's stakeholders, and often have special knowledge of its inner workings, its financial or market position, and so on. Typical inside directors are: An inside director who

1275-416: A proxy advisory firm. The study also shows that companies often improve their corporate governance by removing poison pills or classified boards and by reducing excessive CEO pay after their directors receive low shareholder support. Board accountability to shareholders is a recurring issue. In September 2010, The New York Times noted that several directors who had overseen companies which had failed in

1350-589: A public market (a private, limited or closely held company), owned by family members (a family business), or exempt from income taxes (a non-profit, not for profit, or tax-exempt entity). There are numerous types of business entities available throughout the world such as a corporation, limited liability company, cooperative, business trust, partnership, private limited company, and public limited company. Much of what has been written about boards of directors relates to boards of directors of business entities actively traded on public markets. More recently, however, material

1425-438: A resolution of the remaining directors (in some countries they may only do so "with cause"; in others the power is unrestricted). Some jurisdictions also permit the board of directors to appoint directors, either to fill a vacancy which arises on resignation or death, or as an addition to the existing directors. In practice, it can be quite difficult to remove a director by a resolution in general meeting. In many legal systems,

1500-443: A set fraction of the board's members. The board of directors appoints the chief executive officer of the corporation and sets out the overall strategic direction. In corporations with dispersed ownership, the identification and nomination of directors (that shareholders vote for or against) are often done by the board itself, leading to a high degree of self-perpetuation. In a non-stock corporation with no general voting membership,

1575-415: A single-tier board, while the chairman of the management board is reckoned as the company's CEO or managing director . These two roles are always held by different people. This ensures a distinction between management by the executive board and governance by the supervisory board and allows for clear lines of authority. The aim is to prevent a conflict of interest and too much power being concentrated in

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1650-414: Is dividend and how much it is, stock options distributed to employees, and the hiring/firing and compensation of upper management . Theoretically, the control of a company is divided between two bodies: the board of directors, and the shareholders in general meeting . In practice, the amount of power exercised by the board varies with the type of company. In small private companies, the directors and

1725-406: Is also an additional statutory body for audit purposes. The OECD Principles are intended to be sufficiently general to apply to whatever board structure is charged with the functions of governing the enterprise and monitoring management. The development of a separate board of directors to manage/govern/oversee a company has occurred incrementally and indefinitely over legal history. Until the end of

1800-430: Is also possible that this usage was forgotten and the word was "reinvented" in modern times through the use of the adverbial prefix by- giving the meaning of subsidiary law or side-law (as in byway ). In any case, it is incorrect to claim that the word is related to the prepositional phrase "by law"; that is a modern conjecture contradicted by the evidence. Municipal by-laws are public regulatory laws; which apply in

1875-408: Is associated with rigorous monitoring and improved corporate governance. In some European and Asian countries, there are two separate boards, an executive board (or management board) for day-to-day business and a supervisory board (elected by the shareholders and employees) for supervising the executive board. In these countries, the chairman of the supervisory board is equivalent to the chairman of

1950-416: Is becoming available for boards of private and closely held businesses including family businesses. A board-only organization is one whose board is self-appointed, rather than being accountable to a base of members through elections; or in which the powers of the membership are extremely limited. In membership organizations , such as a society made up of members of a certain profession or one advocating

2025-527: Is complete. Details on how they can be removed are usually provided in the bylaws. If the bylaws do not contain such details, the section on disciplinary procedures in Robert's Rules of Order may be used. In a publicly held company , directors are elected to represent and are legally obligated as fiduciaries to represent owners of the company—the shareholders /stockholders. In this capacity they establish policies and make decisions on issues such as whether there

2100-413: Is considered to be comparatively weak due to the limited time they can dedicate to this task. Overconfident directors are found to pay higher premiums in corporate acquisitions and make worse takeover choices. Locally rooted directors tend to be overrepresented and lack international experience, which can lead to lower valuations, especially in internationally oriented firms. Directors' military experience

2175-454: Is employed as a manager or executive of the organization is sometimes referred to as an executive director (not to be confused with the title executive director sometimes used for the CEO position in some organizations). Executive directors often have a specified area of responsibility in the organization, such as finance, marketing, human resources, or production. An outside director is a member of

2250-406: Is governed by a Board of Directors elected annually by the membership. The Board is composed of active and retired military members and Federal employees. Board members typically serve a three year term. The Board of Directors meets semi-annually at USBA headquarters (Fall and Spring). The Board's duties are performed on a voluntary basis. Board members do not receive a salary. USBA membership

2325-402: Is needed, and how much of a vote is needed. A typical requirement is a two-thirds vote provided that previous notice was given or a majority of all the members . In parliamentary procedure , including Robert's Rules of Order , the by-laws are generally the supreme governing document of an organization , superseded only by the charter of an incorporated society . The by-laws contain

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2400-742: Is open to active duty servicemembers, retired military, honorably discharged veterans, National Guard and Reserve members, federal civilian employees and their families. There are no membership dues. Life insurance USBA offers group term life , whole life and blended life insurance plans underwritten by New York Life Insurance Company which has the highest financial strength ratings possible from all four major independent credit rating agencies: Standard and Poor's (AA+), Moody's Investors Service (Aaa), Fitch Ratings (AAA) and A. M. Best (A++). USBA's group life insurance plans are often used to supplement Servicemembers' Group Life Insurance (SGLI) , or to replace SGLI benefits lost after separating from

2475-702: Is regulated by the central governments of those nations. Accordingly, a bylaw enforcement officer is the Canadian equivalent of the American Code Enforcement Officer or Municipal Regulations Enforcement Officer. In the United States , the federal government and most state governments have no direct ability to regulate the single provisions of municipal law. As a result, terms such as code , ordinance , or regulation , if not simply law , are more common. The Merriam-Webster Dictionary indicates that

2550-408: Is that in large public companies it is upper management and not boards that wield practical power, because boards delegate nearly all of their power to the top executive employees, adopting their recommendations almost without fail. As a practical matter, executives even choose the directors, with shareholders normally following management recommendations and voting for them. In most cases, serving on

2625-459: Is that the board tends to have more de facto power. Most shareholders do not attend shareholder meetings, but rather cast proxy votes via mail, phone, or internet, thus allowing the board to vote for them. However, proxy votes are not a total delegation of the voting power, as the board must vote the proxy shares as directed by their owner even when it contradicts the board's views. In addition, many shareholders vote to accept all recommendations of

2700-400: The 2007–2008 financial crisis had found new positions as directors. The SEC sometimes imposes a ban (a "D&O bar") on serving on a board as part of its fraud cases, and one of these was upheld in 2013. The exercise by the board of directors of its powers usually occurs in board meetings. Most legal systems require sufficient notice to be given to all directors of these meetings, and that

2775-615: The Local Autonomy Law . By-laws therefore constitute part of the legal system subordinate to the Japanese constitution. In terms of its mandatory powers and effective, it is considered the lowest of all legislation possible. Such powers are used to govern the following: In the United Kingdom, by-laws are laws of local or limited application made by local councils or other bodies, using powers granted by an Act of Parliament, and so are

2850-484: The United Kingdom , union by-laws are sometimes a subset of the union's constitution or implement the union's rules in more detail. Nonprofit organizations in the United States applying for Federal Tax-Exemption Status are required to adopt bylaws for their organizations. Bylaws for nonprofit organizations by themselves are more of an internal organizing document than required by most states but are necessary for filing for nonprofit 501(c)(3) tax-exemption application using

2925-524: The shareholders , the law imposes strict duties on directors in relation to the exercise of their duties. The duties imposed on directors are fiduciary duties, similar to those that the law imposes on those in similar positions of trust: agents and trustees . By-laws A by-law ( bye-law , by ( e ) law , by ( e ) law ), is a set of rules or law established by an organization or community so as to regulate itself, as allowed or provided for by some higher authority. The higher authority, generally

3000-504: The 19th century, it seems to have been generally assumed that the general meeting (of all shareholders) was the supreme organ of a company, and that the board of directors merely acted as an agent of the company subject to the control of the shareholders in general meeting. However, by 1906, the English Court of Appeal had made it clear in the decision of Automatic Self-Cleansing Filter Syndicate Co Ltd v Cuninghame [1906] 2 Ch 34 that

3075-564: The CEO and their direct reports (other C-level officers, division/subsidiary heads). Board structures and procedures vary both within and among OECD countries. Some countries have two-tier boards that separate the supervisory function and the management function into different bodies. Such systems typically have a "supervisory board" composed of nonexecutive board members and a "management board" composed entirely of executives. Other countries have "unitary" boards, which bring together executive and non-executive board members. In some countries there

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3150-533: The U.S., the directors which are available to vote on are largely selected by either the board as a whole or a nominating committee . Although in 2002 the New York Stock Exchange and the NASDAQ required that nominating committees consist of independent directors as a condition of listing, nomination committees have historically received input from management in their selections even when the CEO does not have

3225-404: The board is accountable to, and may be subordinate to, the organization's full membership, which usually elect the members of the board. In a stock corporation , non-executive directors are elected by the shareholders , and the board has ultimate responsibility for the management of the corporation. In nations with codetermination (such as Germany and Sweden), the workers of a corporation elect

3300-454: The board is the supreme governing body of the institution, and its members are sometimes chosen by the board itself. Other names include board of directors and advisors , board of governors , board of managers , board of regents , board of trustees , and board of visitors . It may also be called the executive board . Typical duties of boards of directors include: The legal responsibilities of boards and board members vary with

3375-492: The board of directors have historically played a major role in selecting and nominating the directors who are voted on by the shareholders, in which case more "gray outsider directors" (independent directors with conflicts of interest ) are nominated and elected. In countries with co-determination , a fixed fraction of the board is elected by the corporation's workers. Directors may also leave office by resignation or death. In some legal systems, directors may also be removed by

3450-454: The board rather than try to get involved in management, since each shareholder's power, as well as interest and information is so small. Larger institutional investors also grant the board proxies. The large number of shareholders also makes it hard for them to organize. However, there have been moves recently to try to increase shareholder activism among both institutional investors and individuals with small shareholdings. A contrasting view

3525-440: The board to conduct its business by conference call or other electronic means. They may also specify how a quorum is to be determined. The responsibilities of a board of directors vary depending on the nature and type of business entity and the laws applying to the entity (see types of business entity ). For example, the nature of the business entity may be one that is traded on a public market (public company), not traded on

3600-417: The board who is not otherwise employed by or engaged with the organization, and does not represent any of its stakeholders. A typical example is a director who is president of a firm in a different industry. Outside directors are not employees of the company or affiliated with it in any other way. Outside directors bring outside experience and perspectives to the board. For example, for a company that serves

3675-423: The by-laws has to be precise. Otherwise, the meaning may be open to interpretation. In such cases, the organization decides how to interpret its by-laws and may use guidelines for interpretation. Usually, one of the last sections in the by-laws describes the procedures for amending them. It describes who can amend them (usually the membership, but it could be the organization's board of directors ), how much notice

3750-513: The by-laws, is often referred to as a constitution or a constitution and by-laws . Unless otherwise provided by law, the organization does not formally exist until by-laws have been adopted. In some countries, trade unions generally have constitutions , which govern activities of the international office of the union as well as how it interfaces with its locals. The locals themselves can set up their own by-laws to set out internal rules for how to conduct activities. In other countries, such as

3825-410: The company or organization. Outside directors are often useful in handling disputes between inside directors, or between shareholders and the board. They are thought to be advantageous because they can be objective and present little risk of conflict of interest. On the other hand, they might lack familiarity with the specific issues connected to the organization's governance, and they might not know about

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3900-436: The director has a right to receive special notice of any resolution to remove them; the company must often supply a copy of the proposal to the director, who is usually entitled to be heard by the meeting. The director may require the company to circulate any representations that they wish to make. Furthermore, the director's contract of service will usually entitle them to compensation if they are removed, and may often include

3975-487: The director is also a chairperson of a committee, a per-meeting-attended fee of $ 2,000 for meetings attended in person, a $ 500 fee for each meeting attended via telephone, in addition to stock options and retirement benefits. Academic research has identified different types of board directors. Their characteristics and experiences shape their role and performance. For instance, directors with multiple mandates are often referred to as busy directors. Their monitoring performance

4050-478: The division of powers between the board and the shareholders in general meaning depended on the construction of the articles of association and that, where the powers of management were vested in the board, the general meeting could not interfere with their lawful exercise. The articles were held to constitute a contract by which the members had agreed that "the directors and the directors alone shall manage." The new approach did not secure immediate approval, but it

4125-412: The general body of shareholders can control the exercise of powers by the articles in the directors is by altering the articles, or, if opportunity arises under the articles, by refusing to re-elect the directors of whose actions they disapprove. They cannot themselves usurp the powers which by the articles are vested in the directors any more than the directors can usurp the powers vested by the articles in

4200-479: The general body of shareholders. It has been remarked that this development in the law was somewhat surprising at the time, as the relevant provisions in Table A (as it was then) seemed to contradict this approach rather than to endorse it. In most legal systems, the appointment and removal of directors is voted upon by the shareholders in general meeting or through a proxy statement . For publicly traded companies in

4275-411: The general membership retains full power and the board can only make recommendations. The setup of a board of directors vary widely across organizations and may include provisions that are applicable to corporations, in which the "shareholders" are the members of the organization. A difference may be that the membership elects the officers of the organization, such as the president and the secretary, and

4350-426: The hands of one person. There is a strong parallel here with the structure of government, which tends to separate the political cabinet from the management civil service . In the United States, the board of directors (elected by the shareholders) is often equivalent to the supervisory board, while the executive board may often be known as the executive committee (operating committee or executive council), composed of

4425-445: The high cost of cancer treatment by covering expenses like hospital confinement, radiation and chemotherapy, ambulance rides, transportation, extended care facilities and more. Hospital Indemnity Insurance USBA's Hospital Indemnity insurance offers guaranteed acceptance for eligible members and pays tax free (according to current IRS rulings) benefits to cover hospital and doctor bills, as well as regular bills that pile up during

4500-446: The industry or sector in which the organization is operating. Individual directors often serve on more than one board. This practice results in an interlocking directorate , where a relatively small number of individuals have significant influence over many important entities. This situation can have important corporate, social, economic, and legal consequences, and has been the subject of significant research. The process for running

4575-432: The members elect the president of the organization and the president becomes the board chair, unless the by-laws say otherwise. The directors of an organization are the persons who are members of its board. Several specific terms categorize directors by the presence or absence of their other relationships to the organization. Corporations often appoint a former senior executive and ex-board member as honorary president ,

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4650-654: The military, instead of Veterans Group Life Insurance (VGLI). TRICARE and CHAMPVA Supplemental Insurance Plans USBA offers the following supplemental insurance plans which help cover out-of-pocket expenses such as cost shares and copayments. Plans are administered by Association & Society Insurance Corporation (ASI) and underwritten by Monumental Life Insurance Company (Cedar Rapids, IA) , Transamerica Financial Life Insurance Company, Harrison, NY, Transamerica companies . Cancer Care Insurance USBA's Cancer Care insurance, underwritten by Monumental Life Insurance Company (Cedar Rapids, Iowa), helps protect against

4725-408: The most fundamental principles and rules regarding the nature of the organization. It was once common practice for organizations to have two separate governing documents, a constitution and by-laws, but this has fallen out of favor because of the ease of use, increased clarity, and reduced chance of conflict inherent in a single, unified document. This single document, while properly referred to as

4800-463: The nature of the organization, and between jurisdictions. For companies with shares publicly listed for negotiation , these responsibilities are typically much more rigorous and complex than for those of other types. Typically, the board chooses one of its members to be the chairman (often now called the "chair" or "chairperson"), who holds whatever title is specified in the by-laws or articles of association . However, in membership organizations,

4875-430: The officers become members of the board in addition to the directors and retain those duties on the board. The directors may also be classified as officers in this situation. There may also be ex-officio members of the board, or persons who are members due to another position that they hold. These ex-officio members have all the same rights as the other board members. Members of the board may be removed before their term

4950-702: The origin of the word by-law is from the English word bilawe , probably from Old Norse *bȳlǫg , from Old Norse bȳr town + lag-, lǫg law. The earliest use of the term, which originates from the Viking town law in the Danelaw , wherein by is the Old Norse word for a larger settlement as in Whitby and Derby (compare with the modern Danish-Norwegian word by meaning town, or the modern Swedish word by , meaning village). However, it

5025-452: The powers of the board are vested in the board as a whole, and not in the individual directors. However, in instances an individual director may still bind the company by their acts by virtue of their ostensible authority (see also: the rule in Turquand's Case ). Because directors exercise control and management over the organization, but organizations are (in theory) run for the benefit of

5100-554: The public justice system, and offenders can be charged with a criminal offence for breach of a by-law. Common by-laws include vehicle parking and stopping regulations, animal control, building and construction, licensing, noise, zoning and business regulation, and management of public recreation areas. Under Article 94 of the Constitution of Japan , regional governments have limited autonomy and legislative powers to create by-laws. In practice, such powers are exercised in accordance with

5175-516: The secretive nature of the way most companies run their boards, however some standardization is beginning to develop. Some who are pushing for this standardization in the US are the National Association of Corporate Directors , McKinsey and The Board Group. A board of directors conducts its meetings according to the rules and procedures contained in its governing documents. These procedures may allow

5250-409: The service into civilian jobs. Transitioners can search for job openings, find transition advice, and get resume assistance from the nation's largest military placement agency, Orion International, and download helpful job search white papers. Board of Directors A board of directors is an executive committee that supervises the activities of a business , a nonprofit organization , or

5325-468: The shareholders are normally the same people, and thus there is no real division of power. In large public companies , the board tends to exercise more of a supervisory role, and individual responsibility and management tends to be delegated downward to individual professional executives (such as a finance director or a marketing director) who deal with particular areas of the company's affairs. Another feature of boards of directors in large public companies

5400-431: The town or city may regulate through by-laws. It is therefore a form of delegated legislation . Within its jurisdiction and specific to those areas mandated by the higher body, a municipal by-law is no different from any other law of the land, and can be enforced with penalties, challenged in court, and must comply with other laws of the land, such as the country's constitution. Municipal by-laws are often enforceable through

5475-447: The typical articles in by-laws is NOMOMECPA, pronounced "No mommy, see pa!" It stands for name, object, members, officers, meetings, executive board, committees, parliamentary authority, amendment. Organizations may use a book such as Robert's Rules of Order Newly Revised for guidelines on the content of their by-laws. This book has a sample set of by-laws of the type that a small, independent society might adopt. The wording of

5550-548: Was endorsed by the House of Lords in Quin & Axtens v Salmon [1909] AC 442 and has since received general acceptance. Under English law, successive versions of Table A have reinforced the norm that, unless the directors are acting contrary to the law or the provisions of the Articles, the powers of conducting the management and affairs of the company are vested in them. The modern doctrine

5625-513: Was expressed in John Shaw & Sons (Salford) Ltd v Shaw [1935] 2 KB 113 by Greer LJ as follows: A company is an entity distinct alike from its shareholders and its directors. Some of its powers may, according to its articles, be exercised by directors, certain other powers may be reserved for the shareholders in general meeting. If powers of management are vested in the directors, they and they alone can exercise these powers. The only way in which

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