New York lawyers in private practice, in-house counsel and business executives generally understand the broad powers that trustees and boards of directors of business enterprises have in governing their businesses’ affairs, subject to powers conferred by statute upon shareholders. It may be surprising, therefore, for them to discover that the authority of trustees to direct the actions of religious institutions is quite restricted in some instances.

Trustees of not-for-profit entities incorporated under New York’s Religious Corporations Law (RCL) certainly have extensive powers to determine the course of their institutions’ operations. The New York legislature has determined, however, and the courts have recognized, that in certain situations trustees of religious organizations are governed by different rules.