Statutes Governing Decision-Making Outside of In-Person Meetings Jim Slaughter, PRP

Statutes Governing Decision-Making Outside of In-Person Meetings

By Jim Slaughter, PRP

The COVID-19 pandemic has certainly brought into focus how essential meetings are. Nonprofits, unions, places of worship, community associations, condos/homeowner associations (HOA’s), and governmental bodies have all struggled with making decisions when stay-at-home orders prevent in-person gatherings.

This article is not intended to duplicate recent National Parliamentarian (NP) articles on virtual meetings and electronic voting. Instead, it examines what statutory options may exist for making decisions outside of physical meetings.

An NP article on statutory approaches outside of parliamentary manuals may seem odd. However, the best parliamentarians work hand-in-hand with legal counsel, each relying upon the other’s expertise. And parliamentarians should be asked to advise on the wording and practices described below. Also, as noted in my NP article, “Parliamentarians: Avoid the Practice of Law” (First Quarter 1995), parliamentarians need to be aware of and can point out relevant state statutes, even if they should not advise on them. “By doing so, you should earn the respect of your client as well as protect yourself from claims that you have exceeded your authority as a parliamentarian.”

RONR (11th ed.) § 9 p. 97 states that “Except as authorized in the bylaws, the business of an organization or board can be validly transacted only at a regular or properly called meeting.” While the manual notes that an electronic meeting with simultaneous aural communication can be a deliberative assembly, there are multiple references about such a process being “properly authorized in the bylaws.” What if the bylaws are silent about electronic meetings? And if electronic meetings are not permitted, are there no other means by which members might make decisions? For incorporated nonprofits and some organizations, there are statutes that may provide help. (Caveat: Whether the following options apply in a specific situation or whether language in the bylaws

may prohibit any action should be discussed with the organization’s legal counsel or an attorney in that jurisdiction who works with similar types of organizations.)

Boards

Meeting Via Electronic

Communications. There are numerous state statutes that allow boards to hold electronic meetings. Most nonprofit corporation, HOA/ condo, and governmental body statutes provide that a director can participate in a board meeting by electronic communications as long as all members can simultaneously hear and speak to everyone else. Most often that means speakerphone, but other platforms, such as Zoom, could work. As a result, boards can generally meet and transact business through a properly noticed meeting at which there is a quorum, either with board members physically present, or with some or all members present by speakerphone/online conference. Language in governing documents may prohibit such meetings, and a host of technical issues arise for organizations where the general membership can attend board meetings. (Some HOA/condo statutes allow boards to meet by telephone or conferencing as long as all unit owners may participate in the conference directly or by meeting at a central location or conference connection.)

Action Without Meeting. Some statutes permit nonprofit boards to take action by written unanimous consent of all members. Traditionally, this consent has taken the form of a document signed by all board members. Today, it’s possible that a scanned image, or even email, may be sufficient, depending on circumstances. The consent is then included in the minutes or corporate records. If an action taken between meetings is questionable, it may be best for the board to ratify the matter at its next meeting.

Membership

Electronic Meetings. Few states have statutes authorizing electronic membership meetings, but that is likely to change following the COVID-19 pandemic. Some governors have issued state of emergency executive orders permitting virtual membership meetings, but most still require votes to be taken by written ballot following the meeting.

Action by Written Consent.

Many nonprofit statutes allow members to make decisions by written unanimous consent of all members. If such consents are electronic, further steps may be necessary to authorize the process.

Action by Written Ballot. A more common process for members to take action outside of a meeting is by “written ballot.” Many nonprofit statutes provide that actions may be taken without a meeting as long as steps are followed, such as delivery of a ballot to all members, allowing them to vote FOR or AGAINST the proposal. Such ballots can often be

done by electronic transmission, including email, as long as it can be determined that the transmission was authorized by the member. Usually, ballots returned must constitute a quorum, and be returned by a certain date. Elections can typically be held by this process, and some states require it. “Election services” companies exist that can assist in the process.

Specific Types of Actions. As to certain types of organizations, statutes may exist that allow specific actions to be taken without a meeting. For HOAs and condos, some states and the model Uniform Planned Community Act and Uniform Common Interest Ownership Act (2008) provide that the declaration [sometimes called “Covenants, Conditions, and Restrictions (CCRs)” or “restrictions”] can be amended by “written agreement” of “at least sixty-seven percent of the votes in the association.” Similar language exists for terminating a planned community by “agreement.”

conclusion

My hope is that the health crisis that currently has our attention will soon be brought under control. My preference would always be to hold in-person meetings on matters of importance. Announcing and holding a meeting can help avoid questions about notice, due process, etc. In addition, meetings allow for deliberation where proposals can be discussed, and minds changed. Following debate, unacceptable proposals are sometimes modified to become more acceptable and pass. In contrast, most online and electronic voting simply permits an up-or-down, immediate reaction to the proposal.

That said, there will likely be at some point a different crisis or natural disaster that will require the association or its board to act outside of the standard, in-person meeting process. While in-person meetings are preferable, there are other options available. If circumstances exist that make a meeting impossible, parliamentarians should know what other options exist to transact business.

Jim Slaughter, PRP, is an attorney, Professional Registered Parliamentarian, and Certified Professional Parliamentarian-Teacher. He served as first President of the American College of Parliamentary Lawyers. Jim is author of two books on meeting procedure, The Complete Idiot’s Guide to Parliamentary Procedure Fast-Track and Notes and Comments on Robert’s Rules, Fourth Edition. More information is available at www.jimslaughter.com.