Knowing the Difference
What are bylaws and policies? Although both are common words we hear throughout our personal and professional lives, they’re often confused since their meanings have one thing in common: governance.
Both words are meant to bring good governance to our lives—one for where we live and one for where we work.
What Is a Bylaw?
Bylaws are government-regulated policies that define the governance of not-for-profits under the Societies Act and other related legislation. They are the required governing document that guides the Board of Directors of not-for-profit organizations.
Bylaws for these organizations are created by the Board and are based on provincial legislation. They help establish a foundation for the organization to build upon, which filters down into the policies and procedures that all staff and volunteers must follow. They include things like organizational scope, roles and responsibilities, voting, and the relationship between the Board, the Executive Director, and organization members.
How Are Bylaws Created?
In Canada, not-for-profits are typically incorporated as charities under provincial legislation that mandates guidelines on how to govern the organization, from the management of financial documents and incorporations to the roles and responsibilities of the Board of Directors. While these guidelines follow best practices for board governance, there will be differences from province to province. Usually, their legislation includes template bylaws that can be customized to the particular organization and area of interest, but they must include all the required sections and content mandated by the province.
The Board can use outside expertise or support to draft or update bylaws, but the Board of Directors is ultimately responsible for accepting and approving the bylaws. Bylaws must be submitted and approved by the government following the process in the local legislation.
What Is a Policy?
Policies expand on the bylaws to further define roles and responsibilities, guiding principals, to ensure that employees, volunteers, and even clients are respectful and accountable to themselves, colleagues, clients, and their work. Policies set out overarching guidelines and relate to procedures that set out the steps to follow the policy. Because they are not governed by government regulation and can be changed more easily to be responsive to the changing needs of an organization. They will include how to run Board meetings, choose new Board members, and the day-to-day operations of the organization.
Policies must align with the organization’s bylaws. For example, if a policy discusses board governance, descriptions of the board members’ positions are often either attached to the policy or referenced. These descriptions are often included in the bylaws as well, so they should be pulled from the bylaws verbatim and placed within the policy, with reference to the bylaws.
How Is a Policy Created?
A policy is usually created when workplace incidents regularly occur that require guidance to help the organization stay aligned with its values. Policies within the workplace are usually spearheaded by Human Resources.
Once an incident is identified, Human Resources establishes a policy that requires review from the executive or board before it is enforced within the workplace.
Upon approval, Human Resources notifies employees of the new policy and provides either training or additional resources to help managers teach employees and volunteers about it. Then, all manuals with the policy are updated.
Why Are They Confusing?
Bylaws seem similar to policies because they may overlap with your policies. Bylaws are created to establish the legal parameters of the organization and guide all other supporting documentation, including policies. Bylaws have a specific legislated process to establish them, while policies do not.
Because they’re regulated, bylaws are not frequently changed because all updates must be submitted to the government for approval. A best practice is to keep the bylaws concise and focus on the government-mandated content. Use policies and supporting procedures to add details and specifics. These can be updated as needed to keep them current and adaptable to the changing needs of the organization.
Updating your bylaws and policies and feel like you need some extra support? Scriptorium’s team of writers specialize in bylaws, policy and procedural writing, especially with not-for-profit organizations. By working with your team of experts, we can create the documentation your organization needs to uphold its values and principles and support good governance and operations.
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Sources:
● Dalhousie University College of Continuing Education. (2013). By-laws and policies: is there a difference? https://www.governinggood.ca/wp-content/uploads/2013/07/By-Laws-and-Policies-Is-There-a-Difference.pdf
● Government of Canada. (2021). Introduction to policy. https://www.canada.ca/en/heritage-information-network/services/digital-preservation/concepts-developing-policies/introduction-policy.html
● The Muttart Foundation and Alberta Culture and Community Spirit. (2009). Board Development: Drafting and Revising Bylaws for Not-for-Profit Organizations in Alberta. https://open.alberta.ca/dataset/584d2bc3-939c-466b-aefe-1543cdc8ae00/resource/68514ab3-319d-4823-84bf-224c41a8d832/download/board-development-program-drafting-revising-bylaws.pdf
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