Church Governance: Improving Church Bylaws & Board Policies (Interview with David Middlebrook, The Church Lawyers) – Episode 272 | The Unstuck Church Podcast

improving church bylaws and board policies podcast

Fresh Content Each Week

New content to help you lead an unstuck church delivered to your inbox on Wednesday mornings.

We know your inbox is probably full.

We want to make it easier for you to find the right content-the articles, podcast episodes and resources most relevant to where you are in your leadership.

  • Protected: Order – August 7, 2021 @ 01:25 AM

    Podcast Episodes

  • Articles & Blog Posts

  • Protected: Order – August 7, 2021 @ 09:59 AM

    Quarterly Unstuck Church Report

Effective Church Boards & Governance Models (Part 4)

If you enjoy this episode, subscribe on your device for more:
Apple Podcasts   RSS  Stitcher   Spotify

Bylaws and board policies may not be the most exciting topic, but they do play a key role in helping your church board operate effectively. 

David Middlebrook from The Church Lawyers is one of the country’s leading attorneys in the area of religious nonprofit organizations. As David put it, “You have to have a good foundation or you’re going have a bad house. In the same way, the church, that is the house of the Lord, has to have a good foundation legally speaking.”

IMPROVING YOUR BYLAWS & BOARD POLICIES

In this interview, David shared some of the common governance mistakes churches make and provided practical encouragement for initiating positive change in your church. We also discussed:

  • Why governance gets many churches stuck
  • The 3 fiduciary duties of a board member
  • How often bylaws should be reviewed and changed
  • The challenges of large church boards

How to Get Your Church Governance Unstuck

 

Church boards don’t have to be dysfunctional, but more often than not, pastors reach out to us because they are...

At this free webinar, Tony Morgan, Amy Anderson, and special guests help you identify the governance issues that may be holding your church back.

You have to have a good foundation or you're going have a bad house. In the same way, the church that is the house of the Lord has to have a good foundation legally. [episode 272] #unstuckchurch Click To Tweet In ministries that are focused on fulfilling the mission God has given the church, it’s possible to work through potentially difficult governance matters and find success on the other side. [episode 272] #unstuckchurch Click To Tweet
belay primary logo

This Episode is Sponsored by BELAY:

BELAY, a modern staffing organization with fractional, U.S.-based  Virtual Assistant, Accounting, Social Media, and Website services, has helped busy church leaders delegate important details for over a decade.

BELAY is offering its latest book, Lead Anyone From Anywhere, to our listeners for free. In this ebook, you’ll learn the four critical skills necessary to lead a hybrid team. Just text UNSTUCK to 55123 to get back to growing your church with BELAY.


Other Episodes in this Series


Leader Conversation Guide

Want to take this conversation back to a staff or senior leadership team meeting? 

Our Show Notes subscribers get a PDF download that recaps the episode content and includes a discussion guide you can print out and use at an upcoming meeting.

Opt-in here and get the Leader Conversation Guide for this episode, as well as access to the archive.


Share Your Thoughts and Questions on Social Media

We use #unstuckchurch on Twitter, and we start a real-time conversation each Wednesday morning when the episode drops. You can follow me @tonymorganlive and The Unstuck Group @unstuckgroup. If Facebook is where you spend your time, I’m there, too.


Write a Review—It Helps!

Your ratings and reviews really do help more pastors discover the podcast content I’m creating here. Would you take a minute to share your thoughts? Just open the the podcast on iTunes on your phone or computer, click Ratings & Reviews, and leave your opinion. Or leave us 5 stars on Spotify.


Transcript

Tony (00:00):

Before we jump into today’s episode, let me tell you about my friends at Belay. We’ve talked a lot about focus strategies that are actionable and measurable, but what if the only thing stopping you is time? So think of tasks you never seem to catch up on. Maybe it’s sermon preparation or volunteer coordination or supporting new members. What if delegating those could save you an average of 15 hours per week? Belay is a modern staffing organization with fractional, US based virtual assistant accounting, social media, and website services. And they’ve helped busy church leaders do just that for more than a decade. And today, Belay is offering its latest book, Lead Anyone From Anywhere to our listeners for free. In this e-book, you’ll learn the four critical skills necessary to lead a hybrid team. Just text “unstuck,” that’s u-n-s-t-u-c-k to 55123 to get back to growing your church with Belay.

Sean (01:05):

Welcome to The Unstuck Church Podcast, where each week we are exploring what it means to be an unstuck church. My name is Sean, and I’m your host today. And before we get into today’s podcast, if you’re new to these episodes, why don’t you head over to theunstuckgroup.com/podcast and subscribe to get the show notes in your email. When you do, each week you’re gonna get resources to go along with that week’s episode, including our leader conversation guide and some bonus resources, as well as access to our podcast resource archive. So that’s theunstuckgroup.com/podcast to subscribe. Well, Tony, it’s good to be with you again on the podcast and sitting in for Amy, who obviously is getting some well-deserved time off right now. Today we’re wrapping up our series on church governance. Tony, you wanna introduce today’s topic and special guest?

Tony (01:55):

Well, I’d like to say I’m looking forward to today’s topic, but it’s focused on improving church bylaws and board policies. Doesn’t that sound like…

Sean (02:05):

Very exciting.

Tony (02:06):

Yeah, I know. Maybe the marketing team can come up with a more captivating title for today’s episode. But I admit this can be a dry topic. So I invited a lawyer to the conversation today, Sean.

Sean (02:23):

Even better.

Tony (02:23):

So joining us will be David Middlebrook. He’s with The Church Lawyers. David is one of the country’s leading attorneys in the area of religious non-profit organizations. And we’re not going to name names today, but his clients include several high-profile charitable and religious organizations, both in the US and then around the world. And when something pops up at one of the churches that we’re serving at The Unstuck Group that requires legal advice, we always refer pastors and church leaders to David and the team at The Church Lawyers. And as hard as it might be for me, I will refrain from sharing all my lawyer jokes today, Sean.

Sean (03:07):

I don’t believe it.

Tony (03:10):

Yeah, well, in exchange, David has promised he will refrain from sharing all his pastor jokes, so I think that’s a good, that’s a good trade off.

Sean (03:19):

Well, that was nice of him.

Tony (03:20):

Yeah. Today’s topic is all about improving church bylaws and helping boards operate more effectively. And with that introduction, here’s my conversation with David Middlebrook.

Tony (03:35):

David, we’re gonna be talking about best practices related to church bylaws and board policies and procedures. But before we get to that, will you share a little bit about yourself and your law firm?

David (03:46):

Sure, sure. Tony, thank you for inviting me and I really look forward to this. I appreciate all that you guys do and your calling and the impact you’re having for the kingdom. We hear about it and feel it all the time with our clients. So thanks again for letting me come in here and talk. You know, for me, I would’ve been a fifth generation pastor, going back to a vicar in England, to the Assemblies of God. And so I kind of teethed on the church pew and everybody expected me to go onto ministry and I went to law school at my dad’s recommendation, kind of as an in between college and seminary and fell in love with the law, but also primarily fell in love with the fact that I had the opportunity to work with churches and ministries. And that was 33 years ago.

Tony (04:32):

Well, David, I don’t know if you’re aware of this, but through the years we’ve worked now with nearly 600 churches and our sense is that poor governance and dysfunctional church boards it’s actually one of the keys reasons why churches get stuck.

David (04:47):

Yeah.

Tony (04:47):

So, I’m curious, from your perspective, working with so many churches through the years, do you agree that that’s a challenge? And maybe, do you have any stories to share that can confirm my suspicions?

David (04:58):

Sure. Well, you know, I’m a word picture guy. I think in terms of word pictures and, you know, we’re here in Texas. We don’t have basements in Texas cause we have clay soil. And you gotta have a good foundation or you’re gonna have a bad house, right? Well, in the same way, the church that is the house of the Lord has to have a good foundation. Legally speaking, not theologically speaking, but legally speaking, it’s all of the governing documents, articles, bylaws, minutes, board meetings, resolutions, all of those things that allow us to exercise our religious freedoms. And we have to do those correctly, you know, and I always tell folks, they go, why do they call ’em bylaws? Well, cause they’re the laws by which you need to operate. And so when you’re thinking about your bylaws, you have a whole spectrum, and maybe we’ll get into fiduciary duties here a bit, but you have a whole spectrum of duties and responsibilities if you’re in a leadership position, serving on board, et cetera, or as a key employee. And one of those fiduciary duties is the duty of obedience to the law. Well, everybody thinks, oh, well that’s statutes and regulations. It is all of those things, but it begins with the law of your bylaws. You know? So that’s why they’re so critically important. A war story, man, I’ve got so many. I had a, I mean, just explosive church. Man, it was happening and growing, growing, growing, having a huge impact on their state, their community. And so I was doing an onsite, and I always ask to start, you know, Hey, let me see your bylaws. An so they got the bylaws out, and I asked the pastor, I said, well, talks about elders, and it talks about directors. Who are those people? And so he began to describe who they were. And elders in their polity was the classic, why do you call ’em elders? They’re elders. They’re older, you know, they’re got gray hair. And in their documents, their bylaw documents, it said, “and they’re not members of the church.” And so what they’d envisioned was is getting older, more seasoned pastors out there in the world that would come in and serve the role of an elder. And then they had a board, I don’t think they called it a board, but you know, it was functionally a board. And so I got to identify who it was, and I said, well, pastor, your elders are your directors and your directors are your elders. And he said, well, that’s not good. And I said, why is that? He goes, well, if there’s ever issue about me or my employment or something I did, we wanna draw upon the wisdom of these elders cause they really know how to do it. And they have experience. But these board members, they come and go. I said, well, we need to get that fixed like pronto because you’re upside down. And part of it, I noticed when thinking about that conversation was that we have these church words that we use: elder, deacon, trustee, et cetera, et cetera. And they mean a lot to us, you know, wherever we may be. But it doesn’t in the law. I mean, you may call ’em the board of trustees, the board of deacons, the board of elders. And he was using all of those words kind of just in this, you know, hodgepodge. And I was like, I don’t think he understands the difference. And so we started there, and I was trying to explain to him. Man, I’m telling you, that was in April. In June, charges were brought against the pastor before we got the documents fixed. Because there was really no sense of urgency because a lot of times, you know, it’s like, Hey, I’m really busy. Church is growing, we’ve got a big guest coming, you know, all this stuff. And you’re like, Hey, I need to talk to you about your bylaws. Are you kidding me? And I’m like, and so two months later, the people that were supposed to come in, the elders, they didn’t come in. These guys on the board came in and they fired him.

Tony (09:08):

Oh goodness.

David (09:08):

They really didn’t understand what was happening. They didn’t understand the process. Would there have been a different outcome? I don’t know. But it happened so quickly. I was like, wow, you know, just like our wills. You’ve got one. Everybody’s listening’s got one. But just like our will, you know, periodically we gotta get ’em out and make sure they reflect who we are, what we’re doing, and what we wanna accomplish with that document. So that would be my answer to your question, but I could give you a hundred more if you wanna keep going.

Tony (09:35):

I bet, I bet you could. Well, so with that in mind, with those hundreds of stories in mind, what are some of the common mistakes that you see as it relates to church governance?

David (09:45):

Well, a lot of it has to do with not a real clear understanding of what it means to be, fill in the blank. Okay. What does it mean to be an officer? One of the funny things that happens all the time. You would laugh. And I say, well, who’s the secretary of the corporation? Oh, well it’s Helen. You know, she’s been my secretary for 30 years. I was like, no, no, no. Is she the church secretary? Well, I don’t know. What does that mean? Okay, so there’s just not, and I’m being critical. It’s just, it’s not their world. It shouldn’t be their world, but a lot of it has to do with what does it mean to be a key employee? What does it mean to be the chief executive senior pastor? What does it mean to be an officer? And what does it mean to be a director? And then what do you do when you’ve got somebody that is a key employee? Let’s use a senior pastor, a key employee. He’s also the president, the chief executive officer, and a director. You know, how does all that work? And so understanding those things and everybody’s staying in their lane is critically important. How do you get there? I think you start off with, if you’re a baby church, you start off with some training materials and you get everybody to understand what their role is. And I think small churches have a challenge because everybody’s doing everything right. I mean, what do you do? I wear seven hats. We’re a small church. But as the church grows, you need to have everybody have defined roles and understanding what their job description is. Another problem that folks run into regularly is directors trying to micromanage or be involved in operations? You know, again, another word picture. If you think of an orchestra, we’ve all seen orchestras and what do orchestras have? A director. Now, it so happens in a corporate sense, the board of directors, they are only a director. They all have to come together. We have to have a quorum. And they can act as a group, right? They’re a director. They stand up in front of the orchestra and they direct. They give direction. Oh, you know, we ought bring that up and oh, bring that down. And oh, here we go. I’ve never seen a director of an orchestra stop and go into the orchestra and start playing the tuba or playing the violin. They don’t do that. But in the church world, it happens all the time, and it creates lots of problems.

Tony (12:21):

Earlier in this podcast series I mentioned that that is actually one of the biggest mistakes I see in smaller churches is that the board tends to get too involved in the day-to-day ministry decisions. In other words, they don’t empower their senior pastor and staff team to actually lead through their strengths and gifts. So are there some things that can be addressed through the bylaws, or maybe it’s the board policies and procedures to help kind of clarify the roles of the board compared to the roles of the pastor and the staff team?

David (12:53):

Yeah, I think you should have a board governance policy and make it clear, you know, who is what and what their respective roles are. And then sometimes you’re gonna have overlapping roles. You know, you may have somebody that’s an employee, someone else that is a director, and they’re on a subcommittee of the board. You know, so how does all that work? And that should, the broad framework for that should be contained in the governing document, the bylaws of the church. But just having a kind of a philosophical explanation of how you wanna do church is very, very important. And there’s training. I mean, we do training all the time just by Zoom. We’ll come into board meetings and say, okay guys, this is, you know, best practices. This is what we’ve seen work, and these are the problems, and you have questions. And it just helps everybody get kind of on the same page. And I would say this. It sounds like I’m getting down on people that serve on boards, and I’m really not. Because, you know, I rarely encounter someone that’s got a bad heart. I mean, they all are coming cause they wanna help, right? But sometimes the best thing they can do is just serve in their role.

Tony (14:01):

That’s right. And related to this, another challenge that I’ve seen in churches is that pastors or staff members, rather than waiting for the direction of the entire board, start to take direction from individual board members. And that becomes a challenge as well, because different board members may have different perspectives on different decisions and different direction that the ministry’s going

David (14:29):

Again, that would go back, exactly right, Tony, it goes back to the concept of understanding that the board must act as a group. The majority of the board, whatever the rules are in the bylaws, must act as a group. That group must meet. There must be a quorum present. Now they can authorize someone to go carry a message or authorize someone to go do that. But one off’s, you just chaos and it leads to confusion and strife and, not good.

Tony (14:58):

Certainly not unity and alignment of purpose, that’s for sure. It’s interesting though, the biggest mistake that I see with large churches, it’s almost the inverse of that. Because I’ve seen church boards at large churches that are many times too hands off and related to this, they haven’t appropriately engaged in conversations around pastoral succession either. And so because of that, especially when there’s leadership transition, when the board hasn’t been involved, it really gets very challenging for that continuity of leadership and ministry mission and direction. So what are some of the best practices for boards at larger churches that they need to be considering to try to overcome that challenge, David?

David (15:48):

You have to go back to the basic principle of what are the duties of someone that serves as a director on a board, whether it’s a big church, medium church, gig at church, whatever. Well, everybody that serves on a board has fiduciary duties, and fiduciary duties, you know, in my world that kind of gets thrown out like a little hand grenade. Well, you watch out, you violated your fiduciary duties. Nobody really understands what that means. But a very simple concept. Three core elements of a fiduciary duty: a duty of care, a duty of loyalty, and a duty of obedience. What does that mean? Well, the duty of care is what we call on the law the reasonable man or the reasonable person standard. Somebody, the government, the courts, whatever the situation they’re looking at, the actions of an individual director or a board as a group are gonna ask, was that reasonable? Is that what a reasonable person would do in the same or similar circumstances? That’s the standard. A reasonable care. Duty of loyalty means I put the interest of the church, if you’re serving on a church board, in the same degree of care and concern, as I do my own personal stuff. If I don’t do that, if I don’t go to meetings, I don’t care. I don’t read, I don’t listen, I’m not engaged, then I really shouldn’t be on a board because of the duty of loyalty, obedience and care is that you’re going to really focus in on this like it’s important. And then finally the third is obedience. And obedience just means you obey the law. And the law in this context begins with your bylaws. Okay? You obey the law from that all the way up to the latest thing that the springboard says, the latest regulation or the latest, you know, law in your community, whatever. You agree that I’m gonna do it. That’s how you fulfill your fiduciary duties. So doesn’t matter what size church board you’re on, you need to take it seriously. And I understand in particularly the large churches. We represent some churches that, you know, I would’ve never imagined 30-33 years ago that such a church would even exist, you know? But sometimes, you know, in dealing with them, they’re just so good. I mean, it’s like, this is, these guys are so good. They could be a Fortune 500 company. They’re so good. And the director may go, well, what can I do to help? I mean, really they don’t need my help. And I think that’s a bad strategy. It’s a bad approach. And I think it ends up in bad consequences because if you feel that way, you shouldn’t serve on the board. And if the organization feels that way, like kind of you’re a check the box, you’re kinda a nuisance. We have to do this once a year. It’s just a technicality. Then they’re missing out on everything that the board can bring. So it’s what we call in law, the goldilocks rule. I mean, it’s not too much, not too little, but you just want to do it just right. And the best run boards are run just right. Where does that direction come from? It comes from the officers. Okay. Officers, different role than a director. You can be an officer and a director, president and a director, et cetera. But the officers of the corporation, they carry the marching orders of the board and they report back to the board and they speak to employees and they make sure that it all happens. So, you really, if you can get this right, very powerful. And it’s very important. So, I’m sorry, the second part of your question was about succession. So another thing that, we, you know, we’re in this season of succession just in the church in general in Christian. And, you know, it’s generally not a fun topic to approach, you know? But it needs to be approached. And by getting those real life outside of the church walls experience and the boards bringing that, you’re getting consultants to help and all that, then you can prayerfully get to the place that you make the right next decision for the next generation, really.

Tony (20:03):

David, I think one of the challenges, especially, you know, primarily these are pastors and church leaders that are listening into this conversation. And I’ve seen a number of instances where the staff leadership, the pastor, recognizes we have a problem with our governance model right now, but I don’t wanna open that can of worms because I just know it’s gonna lead to all kinds of tension and division in the church. Any encouragement that you would have for pastors that may think they’re facing that type of a dynamic and how they engage this type of a conversation?

David (20:39):

Well, a lot of encouragement. I think, you know, it would start with, and this would be self-serving, but, you know, getting a professional that can help you. And I wouldn’t say it’s just a lawyer. I mean, you know, we love working with you guys because we can come together, and we’re seeing the thing, but from different perspectives. And so you can work together to begin that. I think that a lot of folks make the mistake of trying to make revision of governing documents an event. Okay, lawyer, make ’em change, send ’em back to me next Sunday or whatever. Done. It’s really more of a process. I mean, it should be a process, and the process begins with, again, another word picture. But I believe that, particularly in non-denominational churches, you know, that you should put a calendar reminder at the, you know, 31st of December every year, while I’m sitting at home recovering from the Christmas service: get your bylaws out. Get ’em out and read them. And they should be like a mirror. As you read ’em, you should go, yep, that’s what we did. That reflex is who we are. And if you get to something you’re like, we don’t really do that, or we used to do that, but this is what we do now. This is the time to make those small and incremental changes so you can get it right. And you should do that regularly. Not annually, but annually is a good time to stop and take a look at your bylaws and other policies, procedures and documents you may ask yourself. I didn’t really feel good about the way the board meetings went this last year, so how can we fix it? So it begins a process, and you begin to work through the process and then I think you can avoid a lot of the tumult that comes from those events that people aren’t prepared for.

Tony (22:32):

Well, David, before we wrap up today’s conversation, I’m guessing after this series that there are going to be a number of churches that recognize they need some help with their governance model or their board policies. So can you explain how your team partners with churches to provide that type of help?

David (22:50):

You know, we have just the traditional model where folks retain us. You retain the lawyer. There’s a deposit and a trust account, all that. Not really our favorite way to do our work. I would say probably 70% or more of our clients, we’re retained and we do it through something we call The Church Law Team Program, and it’s $195 a month to retain us. I’d be willing to make it…it’s gotta be something or people don’t value it, but it’s $195 a month or $2,100 a year. That gets us retained and for that, you get an hours’ worth of consultation every month. You get a 25% discount across the board on everything that we do. And at the end of the day, it’s free. You know, you use your monthly consult, it’s free. And we want to talk to folks. We wanna understand what’s going on. We want to be part of the team. And I think when you do that, you can look out and see problems and avoid ’em like scripture talks about. And it allows us over time to develop a relationship so that we do understand what’s going on. So that’s the way we like to work with our clients and it’s been very successful for us.

Tony (24:02):

All right. Well, any final words of encouragement you’d like to provide, particularly to the senior pastors who are listening today?

David (24:08):

Yeah, I wrote down a scripture: James 3:16, and it’s been on my heart recently, just in the course of working with some folks. But it says, “Where there is strife, there is confusion and evil at work.” Now, I don’t think it means at the workplace, but I’m reading it that way, because the truth of it is when there is strife that leads to confusion and that can lead to evil in the workplace. And the church is where we work. We work in that world. And so I would just encourage folks to not be fearful. It’s always good to have somebody to talk to. We always encourage our clients, our CLT client members, we give ’em our cell phone numbers, say, Hey, text me, call me. We know most of the problems you’re gonna have don’t happen Monday through Friday, so let us know so we can be a part of what’s going on. And then ultimately for us, and what I would wish for everybody that’s listening, is whether you work with us or somebody else, have peace of mind so that you can do what God’s called you to do through the church, because it’s never been needed more than it is right now. And we need you. We appreciate you and we wanna be a help.

Sean (25:19):

Well, Tony, of course, David has a lot of wisdom to share on this topic. What stood out to you from the conversation with him?

Tony (25:27):

Sean, to be honest, it really wasn’t anything David specifically said. It was more of a realization that we don’t have to assume changes to bylaws and board policies are impossible or that they will create a lot of division in our churches, especially in ministries that are focused on fulfilling the mission God has given the church. It’s possible to work through these potentially difficult matters and find success on the other side. But there’s no doubt, sometimes we need people with experience and wisdom that we just don’t have. And David and his team can bring that type of wisdom and experience to pastors and church boards who in many instances have never had to navigate these types of decisions in the past. So we probably can’t fix issues like this on our own. We really need someone with wisdom and experience to guide our steps. And by the way, you may have an attorney who is already a part of your church, and all lawyer jokes aside, that’s a good thing. They may even be willing to volunteer their legal support on a project like this, but even so, please don’t make the mistake of relying solely on their advice, on church governance, including board practices, unless they have a lot of experience working with other churches in a ministry context. If you didn’t realize it, churches are unique and because of that, we need, related to bylaws and board policies, we need legal help from someone who really has that type of experience. I mean, what’s the Proverb from scripture, Sean? I think it’s the way of a fool seems right to him, but a wise man listens to advice. And I would say this is one of those instances where you may need some outside advice, some outside help.

Sean (27:18):

Well, before we wrap up today’s conversation and this series, any final thoughts?

Tony (27:24):

Well, we’re wrapping up our podcast conversations on this topic, but if you want to go even deeper, Amy and I and some special guests are hosting a free webinar event. It’s called How to Get Your Church Governance Unstuck. And I wanna invite you to join us on December 1st, and you may also wanna invite your board to tune in as well. You’ll leave this event ready to begin addressing and fixing your governance issues today, so you can get your church unstuck in 2023. So be sure to register for this free event. You can do that right now through the link in your episode show notes.

Sean (27:59):

Yeah, and thanks everybody for tuning in to today’s episode. Make sure you register for our upcoming free governance webinar, and if we can do anything to help you in your church, visit us at theunstuckgroup.com. Next week we’re back with another brand new episode. Until then, have a great week.

Tony Morgan

Tony is the Founder and Lead Strategist of The Unstuck Group. Started in 2009, The Unstuck Group has served 500 churches throughout the United States and several countries around the world. Previously, Tony served on the senior leadership teams of three rapidly growing churches including NewSpring Church in South Carolina. He has five published books including, The Unstuck Church, and, with Amy Anderson, he hosts The Unstuck Church Podcast which has thousands of listeners each month.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.