NOT-FOR-PROFIT | What's a member and what rights do a member have?

• Author: Broder, Peter
• Position: Aga v. Ethiopian Orthodox Tewahedo Church of Canada

A recent Ontario Court of Appeal case, Aga v. Ethiopian Orthodox Tewahedo Church of Canada (Aga), provides some insight into the vexing question of the extent of "member" rights in not-for-profit organizations. Although the idea of such rights seems straightforward, it is anything but.

The litigation in AGA came about because the membership status of a number of congregants in a religious parish was stripped after they questioned decisions by a church Archbishop. The congregants were not corporate members of the legal entity under which the group was constituted and operated. Given that, it was in dispute whether they could rely on the internal disciplinary procedures that the church had established. A broader concern is the extent of procedural fairness required in circumstances of this sort, but that issue was not dealt with in the ruling.

The case suggests that, at least in certain situations, individuals who are not formally part of a group's corporate governance structure may have some protection from being treated unfairly by the organization.

The confusion around this issue comes partly from different uses of the term "member" by not-for-profit groups. In its legal sense, the term is used to refer to stakeholders with voting rights in an organization's corporate structure. However, it is not always used in that way.

Many not-for-profit groups have corporate structures that are quite different from the operational structures they use to engage with their stakeholders. The term "member" often gets used as part of that engagement. In the Aga case, the litigants were not part of the Church's corporate structure but were part of a Congregation.

It is certainly not uncommon for faith-based organizations to take this type of approach to their governance. But it also pops up in other contexts as well. For example, advocacy groups sometimes count those who financially support them (even where their contributions are relatively modest) as among those they speak for, while drawing their corporate governance from a narrower base. When making representations to government or the public, it is obviously valuable to assert the broadest possible backing.

And federated bodies may have a structure that gives members say in local decisions but where governance at the national level is driven by input from local leaders rather than from grassroots members. Being called a "member" of a sports league, or fitness or social club won't necessarily involve...