Monday, July 7, 2025
In times of financial uncertainty, colleges and universities often make bold choices—adding new programs to attract students or cutting others to control costs. While these decisions may seem pragmatic, they can unintentionally nudge institutions away from their original mission. That’s why any major shift in programming, governance, or institutional priorities must prompt a careful review of both the mission statement and the corporate by-laws. These documents are more than administrative formalities—they are legal guardrails and public commitments that guide institutional identity and protect boards from liability. This blog explores when and how to update these foundational documents, and why doing so is critical to ensuring institutional integrity and compliance.
Whenever there is a major change in the mission, governance, or operations of a college, the mission statement and by-laws need to be revised and the state regulators and the Internal Revenue Service (IRS) need to be informed. When a college revises its mission and bylaws, the board should have legal counsel review the changes and shepherd the changes through the state government and the IRS. Legal counsel should be recognized for their work in corporate governance.
Mission Statement
The mission statement is usually a part of the corporation papers of the college. The statement succinctly states the purpose of the college, the goals of the college, and the services to be provided.[i] This statement is recorded with corporate documents at the state office that governs corporations.
Most turnaround projects or strategic restructuring likely necessitate a revision of the mission statement because the college has made major changes in the purpose, goals, or services, of the college. When the mission is revised keep the purpose and services broad enough to accommodate future changes.
Before the Board approves the revised mission statement, they should be provided with a line-by-line comparison between the current mission and the revised mission. The comparison document should explain the reasons for the changes.
By-Laws
By-laws are the rules and basic procedures for governance of the institution by the board of trustees. The governance statement should not include a dual governance statement, which will only sow confusion and conflict and hinder decision-making.
The by-laws cover the roles and responsibilities of officers and board member, procedures for meetings, officers, who is eligible to vote, the method of voting, and the schedule of annual and regular meetings.[ii]
By-laws should be revised when there are significant changes in governance of the college, the services delivered by the college; state or federal laws, to change any of the basic governance rules such as membership and voting.[iii]
Board Training
All board members should participate in an annual training session to bring them up-to-date on major higher educational and legal changes. In addition, the training session should reiterate the basic responsibilities of a board member and the operating policies and procedures of governance. New members should meet with the board chair and president to review responsibilities and expectations of a board member prior to the meeting.
Liabilities of the Board of Trustees
The board must adhere to the mission statement and bylaws. Otherwise, they could be held liable for deviations from the mission statement and by-laws by the government and by employees, in particular, the faculty. Liability in the form of a lawsuit by faculty often occurs when a program is terminated or employees are dismissed because of a reorganization. In order to protect the board and the president, the college should carry directors’ and officers’ insurance. If the college does not carry this insurance, board members could be personally liable in a lawsuit.
Instruct the board about its responsibilities
As simple as that, board directors should be aware of their responsibilities. As federal and state laws change, the board directors’ responsibilities should be adapted to that as well.
For example, reviewing bylaws should include updating the information on how anexecutive committee, governance committee, and other standing committees should operate.
If your organization faces outdated or unaligned bylaws:
Outdated bylaws that were not revised for a long time can most likely be violated, because they are not timely adopted to current law requirements. This can result in various consequences, most of which can lead to litigation.
Among the main consequences of outdated bylaws are the following:
To prevent potential consequences, an external, 3rd party organization should review the bylaws regularly.
Lastly, here is a 5-step process to update bylaws:
The basics of the bylaws reviewing process aredescribedin Robert’s Rules of Order. However, it may look a bit different in certain organizations depending on their nature and jurisdiction.
Below, we provide five general steps of bylaws review process:
The mission and by-laws of a college are not static—they must evolve with the institution. When strategic pivots are made without corresponding updates to governance documents, colleges risk legal exposure, board liability, and, perhaps most critically, a loss of purpose. Whether responding to enrollment pressures, financial restructuring, or academic realignment, institutional leaders must ensure that their mission statements and by-laws remain aligned with operations and compliant with regulatory requirements. Regular review, legal oversight, and board training are not just best practices—they are essential safeguards for sustaining a college’s legitimacy and longevity.
[i] “Mission Statement” (Retrieved March 15, 2025); Wikipedia; Mission statement – Wikipedia
[ii] Board (October 10, 2023); (Retrieved March 15, 2025); How often do Bylaw Need to be Changed; Board; How Often do Bylaws Need to be Updated: Signs and Practices | Ideals Board
[iii] Ibid, Board (October 10, 2023); (Retrieved March 15, 2025)
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