Why are some Southern Baptists currently talking about Sole Membership, and what is it?
by D. August Boto & James P. Guenther
October 14, 2003

The "Sole Membership" issue has to do with an orderly adoption by the Southern Baptist entities of certain amendments to their governing documents (specifically, their articles of incorporation) over the past several years. These amendments restate the traditional relationships historically enjoyed between the entities and the Southern Baptist Convention. These amendments use more modern corporate law language, which is better understood by courts than the language that formerly existed. The amendments did not, however, alter any of the relationships, rights, powers or duties. An analogy that might be appropriate would be that of using a modern day Bible in the English language rather than one containing Hebrew and Greek so as to have better success in witnessing to Americans. In the same way, our SBC entities were adopting modern corporate law language to better apprise courts of our structure in the SBC so as to have better success in surmounting two major problems that had been identified, namely: 1) ascending liability, and 2) future subsidiary allegiance. "Ascending Liability" is the term church groups coined for the legal term, "vicarious liability." It occurs when one organization is held responsible for the liabilities of another. The term came into Southern Baptist vocabulary following a court case in which it was alleged that the United Methodist Church (the denomination) was responsible for the liabilities of a Methodist nursing home. Ascending liability occurs when a court determines that there is excessive control. For example, if the United Methodist Church was found to dominate the management of the nursing home, then the United Methodist church stood to be held responsible for the nursing home's contracts.

So it is important for the legal documents that describe the SBC's relationship to its entities to be clear as possible that the SBC does not control the management of its fostered entities. The SBC's bylaws said this already. The new language would get it clearly said in the entity's charters.

For example, the Convention elects the trustees who manage the International Mission Board. If it is clear in the entity's charter (in addition to the SBC's bylaws) that the IMB's board, not the SBC, manages the IMB's affairs, then the Convention has helped make it clear that the Convention is not responsible for the IMB's liabilities.

Thus, the sole member model allows the entities' instruments to describe how the trustees, not the convention, control the operations of the entity corporations, and it helps show the Convention ought not be held liable for what the entities do or do not do.

On the other hand, the sole member model also allows the Convention, as the corporation's sole member, to perpetuate its historic and fundamental control rights over it entities which will assure that those entities will remain Southern Baptist. So while the instruments spell out the right of the board to govern the entities, they also spell out that the Convention, as the entity corporation's member, has certain unalienable rights. These Convention rights are enumerated in the documents of the entities and are repeated in the following discussion. They are not new rights. They include only fundamental matters, such as the right to determine who sits on the board of trustees, the right to approve charter amendment, and to approve the dissolution, merger or sale of the institution.

And so the new language being utilized in the instruments of the Convention's entities describes a relationship between the entity and the Convention in which the Convention does not control the entities in those ways which would cause the entities' liabilities to "ascend" to the Convention; and, at the same time the relationship is described so that the Convention clearly can prevent an entity from ceasing to be Southern Baptist. The new language does not give the SBC or the boards of the entities more or less control rights over the entity. The present and historic division of control between the Convention and the various boards is simply being described in modern corporate law terms, and the Convention is exercising its traditional rights in its capacity as the entity's member.

"Sole membership” describes a corporation which has only one member. Corporate laws allow nonprofit corporations to have members, or even just a single member, in addition to the corporation's board of trustees. In nonprofit corporations with members, the members' rights and the board's rights regarding governance are specifically recited in the corporation's articles of incorporation or bylaws. The current changes adopted by most SBC entities have been written in this more up-to-date corporate law terminology to better apprise judges and others that the SBC is the only member (the sole member) of each of the various SBC entities, and as such has the right, and has always had the right, to approve certain things (such as who will serve as trustees, as discussed above).

All of the boards of the SBC entities (except for one) had earlier deliberated over and adopted sole membership amendments between 1996 and 2000. The reason sole membership is becoming more widely discussed currently is because the last SBC entity to consider adopting the more modern language of sole membership (New Orleans Baptist Theological Seminary) decided in its October 2003 board meeting not to adopt the necessary amendments. As a result, various state papers reported the fact, and discussions among Southern Baptists naturally followed.

The goal of providing these materials on sole membership is to provide understanding about the issue, its history, and its benefits.

 

 

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