Church Organization and Governance 4/6/2017 Church Organization and Governance Foundational Concepts General Conference Working Policy 201 GC Executive Committee Seminar Silver Spring, MD October 15,2013 Presented by: Lowell C Cooper and Karnik Doukmetzian © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

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Objectives Know key principles of denominational organization and how to apply them. Understand purpose for governance documents in the life of the church. Comprehend importance of bylaws for orderly conduct of constituency meetings. Able to conduct constituency meetings in harmony with the governance documents. Increase knowledge of GC Working Policy and its relevance to leadership issues.

Church governance documents Statement of Fundamental Beliefs General Conference Working Policy or the Division Working Policy The Church Manual Constitution and Bylaws: for conferences and institutions Operating Policy: for units with ‘mission’ status

Two policy books—different roles 2012-2013 Operation of local church Operation of other organizations

GC Working Policy Global leadership decisions regarding how entities live and work together. The ‘family code of conduct.’ 2012-2013

Policy’s purpose: To protect the organization from: Autocratic and erratic leadership Merely reactive decision-making Widely differing patterns of action

Policy’s function: Defines how we do our work Represents a collective decision-making process (executive committee). General Conference Working Policy is the policy framework for the world Church. The Church Manual is the policy framework for the operations of local churches. Is dynamic, can be amended.

Policy: the big picture Organizational Structure Operating Principles Procedures and Practices

GC Working Policy Section B Organization and Administration

SDA Concept of Organization: GC Working Policy D 05 “…The fruitage of that concept is a representative and constituency-based system. Its authority is rooted in God and distributed to the whole people of God. It recognizes the committee system. It provides for shared administration (president, secretary, treasurer) rather than a presidential system.

SDA Concept of Organization: It recognizes a unity of entities (church, conference, union, General Conference) based on mission, purpose, and belief that binds the believers together in a universal fellowship. While the integrity of each entity is recognized (church, conference, union), each is seen to be a part of a sisterhood which cannot act without reference to the whole.”

Eight key concepts to know: Membership basis of organization Conferred status Representative and constituency-based Authority rooted in God, distributed to whole Committee system (decisions made by groups) Shared administration, not presidential Unity of entities (mission, purpose, belief create bond of fellowship) Separate but not independent organizations

Eight key concepts to know: Membership basis of organization

1. Membership basis: Membership only in one place at a time Membership required for participation in the business meetings or to hold office Boards and committees also have defined memberships (What about invitees role?)

The pattern of membership Organization Members Local church Local conference/mission Union conference/mission General Conference Persons Local churches Local conferences/missions Union conf/missions

Primary building blocks General Conference and its divisions Union conference/mission/of churches Local conference/mission Local church

Divisions: Not constituency-based units “Divisions” of the General Conference

Divisions: To facilitate its worldwide activity, the General Conference has established regional offices, known as divisions of the General Conference, which have been assigned…general administrative and supervisory responsibilities for designated groups of unions and other church units within specific geographic areas. (…The division executive committee acts for the General Conference Executive Committee in the territory of the respective division.) GCWP B 20 10

Divisions: B 40 20 Divisions a Part of General Conference—The larger and more extensive the work of these divisions, and the less dependent any may become upon help from other divisions…the greater the necessity of holding closely together in mutual counsel and fellowship. It is ever to be held in mind that each division is a part of the General Conference.

Divisions: In the church of Christ, which is His body, there can be no such thing as one part or member independent of the whole. No division, therefore, is free to pursue a course of action contrary to the will of the whole, or to appropriate to itself the authority of the General Conference in defense of such action. Between sessions of the General Conference, the General Conference Executive Committee is constitutionally the final authority throughout the world field. GCWP B 40 20

Eight key concepts to know: Membership basis of organization Conferred status

2. Conferred status: Membership is always a privilege granted by a group (e.g. no one can baptize himself/herself) Organizational status is never self-proclaimed nor self-derived nor automatically perpetual Membership is not a right Membership can be withdrawn by the same group that granted it

Eight key concepts to know: Membership basis of organization Conferred status Representative and constituency-based

3. Representative democracy: In a direct democracy every member can vote on each decision–particularly in the choice of leaders Representative democracy involves the selection of representatives who then vote in the decision-making process Representatives are chosen by defined group processes

Eight key concepts to know: Membership basis of organization Conferred status Representative and constituency-based Authority rooted in God, distributed to whole

4. Authority distributed: Authority of the Bible with respect to organization

Both James White and Joseph Bates initially claimed that organizational design should be patterned after the “perfect system of order, set forth in the New Testament.” (RH, Jan 23, 1855, 164). However, by 1859 White argued that “we should not be afraid of that system which is not opposed by the Bible, and is approved by sound sense.” (RH, July 21, 1859, 68 emphasis supplied).

Distribution of authority: Authority of the Bible re: organization Authority distributed throughout organization Different types of authority at local church, conference, union, division, General Conference Distribution of authority helps to unite the church–no one part complete in itself

Eight key concepts to know: Membership basis of organization Conferred status Representative and constituency-based Authority rooted in God, distributed to whole Committee system (decisions made by groups)

5. Committee system: Most important decisions made by groups Authority ascends to a group Every elected/appointed leader is accountable to a group No group or committee has authority equal to or greater than the group that appointed it

Eight key concepts to know: Membership basis of organization Conferred status Representative and constituency-based Authority rooted in God, distributed to whole Committee system (decisions made by groups) Shared administration, not presidential

6. Shared administration Officer team arrangement—not presidential 3-officer team—avoids kingly power, decreases potential for conflict, provides specialization President reports to Exec Comm in consultation with co-officers Secretary reports to Executive Committee after consultation with the President Treasurer reports to Executive Committee after consultation with the President

Eight key concepts to know: Membership basis of organization Conferred status Representative and constituency-based Authority rooted in God, distributed to whole Committee system (decisions made by groups) Shared administration, not presidential Unity of entities (mission, purpose, belief create bond of fellowship)

What holds the church together?

What holds the church together?

What holds the church together? Our submission to the Holy Spirit Commitment to worldwide mission Respect for the Church as a ‘body’ Willingness to keep striving for togetherness

Policy is the result of unity, not the cause of it!

Growth in any organization will tend towards fragmentation. “Together we can do more.”

Organizational tension Centralization vs decentralization

The Church needs both The purpose of centralization is more for coordination than for control. The purpose of decentralization is more for responsiveness to mission in local situations than for independence.

Eight key concepts to know: Membership basis of organization Conferred status Representative and constituency-based Authority rooted in God, distributed to whole Committee system (decisions made by groups) Shared administration, not presidential Unity of entities (mission, purpose, belief create bond of fellowship) Separate but not independent organizations

8. Separate but not independent: …each level of organization exercises a realm of final authority and responsibility that may have implications for other levels of organization. In a similar manner, each organization is dependent to some extent on the realm of authority exercised by other levels of organization. (B 05 cl. 6)

SDA Church polity Interlocking and interdependent Congregational Hierarchical Interlocking and interdependent

Eight key concepts to know: Membership basis of organization Conferred status Representative and constituency-based Authority rooted in God, distributed to whole Committee system (decisions made by groups) Shared administration, not presidential Unity of entities (mission, purpose, belief create bond of fellowship) Separate but not independent organizations

The Legal Structure of the Church Most of the denomination’s activity is accomplished through status as an unincorporated entity. However, the Church also exists in an environment of that obligates the Church to have ‘legal personality’ along with its privileges and responsibilities.

Corporation-Definition A company or group of people authorized to act as a single entity (legally a person) and recognized as such in law Unlike Associations, partnerships or sole proprietorships

Corporation In Law, treated like person Perpetual life Empowered to enter contracts, leases, borrow money buy property, goods and services without imposing personal liability on individuals who carry out those activities Can sue or be sued Recourse only against legal entity not individuals Liability limited to assets

For Profit Can sell shares to raise funds Profit driven Entitled to make profits Owners Shareholders Profit driven Distribution of assets to owners Can be sold Directors can be compensated for serving on Boards

Non-Profit/Charity Usually started by a group or individual for particular purpose Members Mission driven Can’t be sold, can only be dissolved Who owns non profit? No one Everyone Charities Exist for the public good-Public Purpose (religious, educational, scientific, charitable)

Non-Profit/Charity Directors cannot be compensated for serving on Board On dissolution assets turned over to another charity In some instances greater scrutiny/oversight

‘Persons’ in the SDA Church? Conference/Mission Corporations Union Conference (Missions & Union of Churches) General Conference Corporation Institutional Corporations Who Owns The Above “Legal Persons”? Constituent Members & Stockholders

Formation of SDA Corporations Corporations to serve General Conference must be authorized by Executive Committee (GC Constitution) BA 25 05 GC WP The incorporation or registration of legal entities of the Church, other than at the General Conference level, is subject to division policy which takes into consideration the principles of denominational organization and representation, laws of jurisdictions, and the specific needs of the Church in the geographic areas served. Unless local laws require otherwise, the local church operates under the legal structure of the local conference, mission, or union of churches and not as a separate legal entity.

Formation of SDA Corporations Prior Consultation and Permission (GC WP 25 10) Divisions have own process NAD Requires NADCOM Approval and also approves Denominational Status Conference Corporations serve as trustees, hold property, invest trust funds, enter into contracts, Operate in situations where legal status is required

Historical Structure CONFERENCE ASSOCIATION-CORPORATION Unincorporated nonprofit association All operational aspects of the Conference including employees Ecclesiastical organization ASSOCIATION-CORPORATION Nonprofit religious corporation All legal aspects of property ownership, trusts Legal organization

Dual Structure Organizations Some entities have merged the Association-Corporation and the Conference into one Reasons Reduce liability Local legal requirements Confusion between dual structure

Best Distinction Corporate Ecclesiastical Bound by local corporate law Constitution and Bylaws Board has fiduciary responsibility to members Ecclesiastical Commitment to Working Policy and Church Manual Unincorporated Association Perhaps different set of laws depending on jurisdiction dealing with unincorporated associations

GC Working Policy “…the accumulated policies adopted by General Conference Sessions and Annual Councils of the General Conference Executive Committee. It is, therefore, the authoritative voice of the Church in all matters pertaining to the mission and to the administration of the work of the Seventh-day Adventist denomination in all parts of the world.” (GCWP B 15 05)

No departure from these policies shall be made without prior approval from the General Conference Executive Committee… (GCWP B 15 10)

Officers and administrators are expected to work in harmony with the General Conference Working Policy. Those who show inability or unwillingness to administer their work in harmony with policy should not be continued in executive leadership... (GCWP B 15 15)

Leadership standard of conduct Compliance with Working Policy is a standard of conduct for Seventh-day Adventist leaders.

Class assignment Read, understand and apply General Conference Working Policy Section B. Orient new officers of local fields and institutions to the concepts in GCWP Section B.

Questions or Comments?

Quiz Time The chairperson of the executive committee frequently makes provision for ‘invitees’ to attend executive committee meetings. As a courtesy, the chairperson extends to the invitees the privilege of ‘voice and vote’. How does an understanding of operating principles in the Church determine what the chairperson can/cannot do in regards to granting invitees the right to vote?

Quiz Time What holds the Seventh-day Adventist Church together as a worldwide faith community?

Quiz Time Name four of the eight key concepts of Seventh-day Adventist organization.

Quiz Time Why are divisions not included in the constituency-based units of denominational structure?

GC Working Policy Section D Model Constitutions and Operating Policies

Governing documents--importance Define identity, relationships, membership and territory of operation Protects the voice of the membership within and organization

Model governance documents Constitutions Bylaws Operating policies

Organizational status--Conference Official part of the Seventh- day Adventist Church Highest level of self- governance available Indicates organization is net contributor to global resources Officers elected by the constituency session Governance document: Constitution and bylaws—can be amended by constituency

Organizational status--Mission Official part of the SDA Church Moving towards conference status Organization may be a net recipient of global resources Officers appointed by the next higher level of organization Governing document is Operating Policy approved by next higher level Cannot amend its own operating policy.

The 54th General Conference Session, in its consideration of the Role and Function of Denominational Organizations, pointed out that the constitutions, bylaws and operating policies of all denominational organizations should be consistent with the Seventh-day Adventist concept of the church, its organization, and governance. (GCWP D 05)

Bold print and regular print Sec. 1. Regular Meeting: This union conference shall hold a regular quinquennial constituency meeting at such time and place as the executive committee of the union conference shall designate. Notice of the time and place of the meeting of the delegates representing the members shall be given by a. A notice printed in the official publication of the union conference at least four weeks before the date of the session, or

Why so much bold print? Those sections of the model bylaws that appear in bold print are essential to the unity of the Church worldwide, and shall be included in the bylaws as adopted by each union conference. Other sections of the model bylaws may be modified as set out in Bylaw Article XII, provided they continue to be in full harmony with the provisions of this model. (GCWP D 10 05)

Constituency Session—definition Constituency—a body of persons/members entitled to make official decisions such as election of officers and executive committees A ‘business meeting’ of an organization’s members The local church also has a constituency meeting but this is ordinarily called a business meeting—all members may attend and, unless under censure, may participate through discussion and voting on matters to be decided

The concept of membership Organization Members Local church Local conference/mission Union conference/mission General Conference Persons Local churches Local conferences/missions Union conf/missions

Constitution (sometimes called Articles) Describes organization’s identity, relationships and territory

What is in the Articles? Name Purpose Relationships Geographic Territory Membership/Constituency Bylaws* Dissolution/Disposition of Assets Amendments* * These items not in ‘Operating Policy’ for Missions

Bylaws How the organization functions

What is in the Bylaws? Principal Office Membership/Constituency Mtngs Representation Constituency Meeting Committees Executive Committee Officers Directors of Depts/Assoc/Service Other Organizations Finance Budget, Employee Comp…Audit Indemnification Amendments

Constituency sessions: The organization’s provision for the VOICE of the MEMBERSHIP A primary function of the Bylaws is to define the processes whereby the membership fulfills its authorized role in decision-making.

Constituency session: step by step Session types: Regular or Special Planning phase ‘Getting started’ phase ‘Doing Business’ phase Closing phase Documentation phase

Bylaws—important for planning Definition of membership Frequency and location of constituency meetings Period and method of meeting notice required Delegate quotas (regular and at-large) Outlines procedures and business of the session

Definition of membership Article V—Membership The membership of this conference shall consist of such churches as have been or shall be properly organized in any part of the geographic territory under its jurisdiction and formally approved for membership by vote of the delegates at any regularly scheduled constituency meeting.

Regular session: Frequency/location Article II—Constituency Meetings Sec. 1. Regular Meeting: This conference shall hold a regular __________ (biennial, triennial, quadrennial, or quinquennial) constituency meeting at such time and place as the executive committee of the conference shall designate. Notice of the time and place of the meeting…shall be given by a. A notice printed in the official publication of the Union at least four weeks before the date… or b. A method approved by the Conference Executive Committee.

Delegates—Selection process Regular delegates representing local churches in a conference constituency are chosen at a business meeting of the local church—not by the pastor, the church board, or the conference administration or committee.

Delegates—At large All members of the executive committee… All members of the executive committee of the Union who may be present… All employees holding credentials or ministerial licenses issued by this conference. Members of the GC Executive Committee…not exceed ten % of total other delegates. Others recommended by the executive committee and accepted by the delegates in session…not exceed ten % of total regular delegates

Rules of Order Bylaws generally indicate what Rules of Order will be used. (i.e. General Conference Rules of Order) Facilitate orderly group discussion and decision-making—courtesy, justice, impartiality, equality Majority rules while protecting rights of the minority The Chair may rule on issues not specifically covered in Rules of Order. If anyone appeals the ruling of the Chair, the matter is decided by group vote Business is conducted one item at a time

Articles/Bylaws amendments Requires advance work by competent individuals Must correspond to model constitution in GC Working Policy Proposed amendments need Conference Executive Committee recommendation Bylaws may specify that proposed amendments must be included when notice of meeting is given Bylaws changes generally require 2/3 majority vote, not just a simple majority vote

Documentation phase Preparation and preservation of minutes Printing/circulation of amended governance documents Letters to all persons who have been elected What position and term of office Notifications to other organizations regarding elections Arrangements for officer transitions (moving, changes in bank account signatures, etc.) Post-session evaluation: What worked/didn’t work? Things to do next time.

7 Common Mistakes Document is out of date Not in harmony with model documents Not read and understood Constituency meeting actions undocumented Constituency meeting procedures not in harmony with documents Delayed preparation of amendments Insufficient orientation of leadership

for the next constituency session Begin preparing for the next constituency session NOW!

The most important human resource for the Church is TRUST

Class assignment Read, study and understand the governance document for your unit of organization. Ensure that the governance document is up to date. Ensure that subsidiary units have up to date governance documents and that leaders know how to conduct constituency sessions.

Questions or Comments?

Quiz Time Here is a statement from a current set of conference bylaws: Article III Constituency Meeting Representation The _________ Conference Executive Committee reserves the right to accept or reject any recommendation from churches regarding delegates. In what way does this bylaw contradict a basic principle of denominational operation in conference constituency meetings? How should this bylaw be changed?

Quiz Time The Union Mission executive committee votes ‘transfer orders’ for a local conference president to take up administrative duties in another field. How should this matter have been handled? Why?

Quiz Time Compare organizations with ‘conference’ status and organizations with ‘mission’ status. Identify at least one way in which the organizations are similar and one way in which they are dissimilar.

Quiz Time Why do the model governance documents (constitutions, bylaws, operating policies) in General Conference Working Policy contain text in bold font as well as in regular font?

Quiz Time How can church leaders act in ways that build membership trust—both in the leaders themselves and in the church as an organization?

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