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Board of 3- SMALL COMPANY


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We are a board of 3 with no members. At our last Board Meeting the Chair who's is also the CEO made a motion to amend a certain bylaw. There was a second by the second board member. In discussion, the third board member cited that he was not notified ahead of time that the bylaw was going to amended and did not agree that an amendment could take place at that meeting. The disagreeable minority board member cited that the agenda sent ahead of time only noted the topic but not the intent to amend and did not feel that was correct procedure. The chair then tabled the discussion and made an impromptu motion to add the amendment of the bylaw to the meeting and agenda. There was a second and the vote was carried. Next the chair revisited the tabled discussion of amending the specific bylaw and a vote eventually occurred and the bylaw was amended 2 in favor 1 not in favor. In a small board of 3 is this appropriate procedure?

The amendment was to strike a few words to give the CEO hiring and firing authority and to set compensation for employees unless they are officers. Prior to the amendment the BOD had to vote to hire/fire every employee in the company and to set compensation. The minority board member wants the hiring and firing of all agents and employees and officers to be voted on at the BOD level but 2 of 3 board members disagree and feel the CEO should be allowed to manage the operations of the company. The minority board member also feels there is a conflict of interest because the Chailr is also the CEO. Is this minority Board member misinformed or should have this been or should be handled differently?

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What do the bylaws say about the process of amendment? Is previous notice required, or isn't it? If it's required, it's required.

The shenanigans of adding the amendment of the bylaws to the agenda, during the same meeting where the amendment is to be considered, sound pointless -- adding something to the agenda on the spot does not constitute previous notice by any reasonable definition.

However, if there are only 3 members, and if 2 of them are in favor of the amendment, it sounds like it will go through in the end, one way or another.

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Normally the lack of notice (presuming your bylaws require notice for bylaw amendments) would be sufficient to cause a "continuing breach" - p. 251 - and nullify the amendment...

But, since were are no absentees during the meeting and the basis for a continuing breach, in your case, would be the protection of absentee rights, the "absentee right" rule may not apply. RONR doesn't speak to this particular quirk; it certainly would have been a much clearer situation if a proper notice had gone out to all three members, but, IMO, the bylaws have been amended, somewhat improperly, but the time to raise objections or points of order has past.

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However, if there are only 3 members, and if 2 of them are in favor of the amendment, it sounds like it will go through in the end, one way or another.

Yes, there's very little that one member of a three-member body can do about anything if the other two members are in agreement.

(And, by the way, seconds aren't required at meetings of such a small board.)

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Normally the lack of notice (presuming your bylaws require notice for bylaw amendments) would be sufficient to cause a "continuing breach" - p. 251 - and nullify the amendment...

But, since were are no absentees during the meeting and the basis for a continuing breach, in your case, would be the protection of absentee rights, the "absentee right" rule may not apply. RONR doesn't speak to this particular quirk; it certainly would have been a much clearer situation if a proper notice had gone out to all three members, but, IMO, the bylaws have been amended, somewhat improperly, but the time to raise objections or points of order has past.

Or... is passed... oh, wait a minute... ;)

To the original poster, I'm not disagreeing here with the substance of Dr. Stackpole's comments, just picking a nit over grammar.

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Normally the lack of notice (presuming your bylaws require notice for bylaw amendments) would be sufficient to cause a "continuing breach" - p. 251 - and nullify the amendment...

But, since were are no absentees during the meeting and the basis for a continuing breach, in your case, would be the protection of absentee rights, the "absentee right" rule may not apply. RONR doesn't speak to this particular quirk; it certainly would have been a much clearer situation if a proper notice had gone out to all three members, but, IMO, the bylaws have been amended, somewhat improperly, but the time to raise objections or points of order has past.

The language used in the paragraph which begins on page 263, line 29, and ends on page 264, line 5, makes it clear that the rule prohibiting suspension of a rule protecting absentees applies only if a member is absent. If there are no absentees, there is no one to protect.

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The language used in the paragraph which begins on page 263, line 29, and ends on page 264, line 5, makes it clear that the rule prohibiting suspension of a rule protecting absentees applies only if a member is absent. If there are no absentees, there is no one to protect.

Interesting. So, not only is there no continuing breach after the fact, but even a point of order raised immediately at the meeting (which is sort of what the amusingly named 'disagreeable board member' tried to do) also wouldn't have leg to stand on, at least not in the face of a two-thirds vote to suspend a relevant bylaw requiring prior notice?

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I'm not even sure you need to formally move to "suspend" the bylaw at all, since it simply has no applicability in the situation when all members are present.

Except that if the bylaws required prior notice of bylaws amendments, I as a member would reasonably expect that a bylaws amendment won't just be sprung on me at a meeting, with no prior opportunity to look at it or think about it. I might wave my copy of the bylaws and say, "Look, it says right here that we have to get 30 days notice of any bylaws amendment. Presenting it at today's meeting without notice is in violation of the bylaws."

And I think I would be right.

However, if all the members are there, apparently the rule in the bylaws can be suspended, if the assembly votes to do so.

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Something else for RONR 12th ed. to take care of: Is a motion to suspend a previous notice requirement necessary when all members are in attendance? If a point of order is raised (that there was no notice) is that point dilatory, or at least "not well taken"?

One could argue that another purpose of the notice is so that members will be "fairly inform[ed]" (p. 569, line 27) of the amendments and hence have time to contemplate them. But I have been told, on highest authority, that a failure to "fairly inform" is not sufficient to generate a continuing breach when all members are present for the consideration of the motion to amend.

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Except that if the bylaws required prior notice of bylaws amendments, I as a member would reasonably expect that a bylaws amendment won't just be sprung on me at a meeting, with no prior opportunity to look at it or think about it. I might wave my copy of the bylaws and say, "Look, it says right here that we have to get 30 days notice of any bylaws amendment. Presenting it at today's meeting without notice is in violation of the bylaws."

I agree. It seems inappropriate that while at a meeting where all the members are in attendance, someone could just simply make a motion to amend the bylaws. Perhaps they had been prepared to give notice at the meeting to bring it up at the next meeting, as per the bylaws, and then with all members in attendance decided to just go ahead and move the amendment. It just doesn't seem right to me.

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One could argue that another purpose of the notice is so that members will be "fairly inform[ed]" (p. 569, line 27) of the amendments and hence have time to contemplate them. But I have been told, on highest authority, that a failure to "fairly inform" is not sufficient to generate a continuing breach when all members are present for the consideration of the motion to amend.

You were correctly informed. :)

As for the object of giving notice, see page 581, lines 12-15.

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Something else for RONR 12th ed. to take care of: Is a motion to suspend a previous notice requirement necessary when all members are in attendance? If a point of order is raised (that there was no notice) is that point dilatory, or at least "not well taken"?

One could argue that another purpose of the notice is so that members will be "fairly inform[ed]" (p. 569, line 27) of the amendments and hence have time to contemplate them. But I have been told, on highest authority, that a failure to "fairly inform" is not sufficient to generate a continuing breach when all members are present for the consideration of the motion to amend.

Is there any doubt about the answer to Dr. Stackpole's questions? If the rule (about notice requirement) becomes suspendable when the entire membership is in attendance, I would think the membership must vote to suspend the rule before the rule is actually suspended. The rule doesn't just evaporate when the very last member walks into the room.

It's like a bylaw containing provisions (a described process) for its own suspension. That process must be carried out before the bylaw can be considered suspended.

Even if 90% of the members believe, on first glance, that they favor the just-introduced bylaws amendment, it is still possible that the assembly will not get a two-thirds vote in favor of suspending the previous notice requirement -- there may be enough members who value the extra time to think about the amendment that they will not vote to suspend the rule requiring previous notice.

edited: I had also quoted an earlier post by DHH (post #13), but it wasn't direcly related to the comments I ended up making here.

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Is there any doubt about the answer to Dr. Stackpole's questions? If the rule (about notice requirement) becomes suspendable when the entire membership is in attendance, I would think the membership must vote to suspend the rule before the rule is actually suspended. The rule doesn't just evaporate when the very last member walks into the room.

It's like a bylaw containing provisions (a described process) for its own suspension. That process must be carried out before the bylaw can be considered suspended.

Even if 90% of the members believe, on first glance, that they favor the just-introduced bylaws amendment, it is still possible that the assembly will not get a two-thirds vote in favor of suspending the previous notice requirement -- there may be enough members who value the extra time to think about the amendment that they will not vote to suspend the rule requiring previous notice.

edited: I had also quoted an earlier post by DHH (post #13), but it wasn't direcly related to the comments I ended up making here.

There is no need to suspend a rule protecting the rights of absentees when there are no absentees.

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There is no need to suspend a rule protecting the rights of absentees when there are no absentees.

Protecting the rights of absentees is indeed one purpose of a rule requiring prior notice.

It is clearly not the only purpose of such a rule.

If a society has nothing in its bylaws about the process for amendment, and falls back on what is written in RONR, then perhaps the claim can be made that the notice requirement (in the default amendment rules given by RONR) is there solely for the purpose of protecting the rights of absentees.

However, if a society writes down an amendment process in its bylaws, and if the process requires previous notice, how can someone outside the society possibly say that the only purpose of the society's rule is to protect absentees?

In short (and quite uncharacteristically) I am not persuaded by your answer.

'the rules requiring the presence of a quorum, restricting business transacted at a special meeting to that mentioned in the call of the meeting, and requiring previous notice of a proposed amendment to the bylaws protect absentees, if there are any, and cannot be suspended when any member is absent.' (pp. 263-264) The obvious corollary is that -- when no member is absent, those rules can be suspended (not -- when no member is absent, those rules vanish into thin air with no further intervention from the assembly).

(To be clear, I am not claiming that a continuing breach would result if the assembly, with all members present, breaks the rule requiring previous notice.)

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Protecting the rights of absentees is indeed one purpose of a rule requiring prior notice.

It is clearly not the only purpose of such a rule.

If a society has nothing in its bylaws about the process for amendment, and falls back on what is written in RONR, then perhaps the claim can be made that the notice requirement (in the default amendment rules given by RONR) is there solely for the purpose of protecting the rights of absentees.

However, if a society writes down an amendment process in its bylaws, and if the process requires previous notice, how can someone outside the society possibly say that the only purpose of the society's rule is to protect absentees?

In short (and quite uncharacteristically) I am not persuaded by your answer.

'the rules requiring the presence of a quorum, restricting business transacted at a special meeting to that mentioned in the call of the meeting, and requiring previous notice of a proposed amendment to the bylaws protect absentees, if there are any, and cannot be suspended when any member is absent.' (pp. 263-264) The obvious corollary is that -- when no member is absent, those rules can be suspended (not -- when no member is absent, those rules vanish into thin air with no further intervention from the assembly).

(To be clear, I am not claiming that a continuing breach would result if the assembly, with all members present, breaks the rule requiring previous notice.)

If the society has bylaws that are substantially the same as the sample bylaws in RONR, RONR itself tells you that "the" (not "a") object of the notice requirement is "to alert the members to the proposed amendment so that all those interested can arrange to be present at its consideration." (P. 581, ll. 12-15).

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There is no need to suspend a rule protecting the rights of absentees when there are no absentees.

A society has as its bylaws the sample bylaws provided for in RONR (reference articles on Meetings and Amendments). After the February meeting, Member X decides to propose a bylaw amendment, and prepares it to bring to the March meeting to provide notice as per the bylaws, the amendment expected to be voted on at the April meeting. As luck would have it, the entire membership is present at the March meeting.

So, can Member X the move the amendment under New Business, foregoing the notice requirement, since there are no absentees?

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A society has as its bylaws the sample bylaws provided for in RONR (reference articles on Meetings and Amendments). After the February meeting, Member X decides to propose a bylaw amendment, and prepares it to bring to the March meeting to provide notice as per the bylaws, the amendment expected to be voted on at the April meeting. As luck would have it, the entire membership is present at the March meeting.

So, can Member X the move the amendment under New Business, foregoing the notice requirement, since there are no absentees?

Didn't I just answer this question? :)

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Didn't I just answer this question? :)

Just like my therapist, answering a question with a question. At least I don't have to pay you $85/hour for the service. :)

So, if the society's bylaws contain no amendment provision, and thus the rule on p. 581 ll. 4-7 applies, could a bylaw amendment then be moved under New Business and adopted with only a 2/3 vote, since the provision of notice is not a requirement when there are no absentees?

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Just like my therapist, answering a question with a question. At least I don't have to pay you $85/hour for the service. :)

So, if the society's bylaws contain no amendment provision, and thus the rule on p. 581 ll. 4-7 applies, could a bylaw amendment then be moved under New Business and adopted with only a 2/3 vote, since the provision of notice is not a requirement when there are no absentees?

Yes, and it could also be adopted by the vote of a majority of the entire membership, which, under the circumstances you describe, will most likely be easier to obtain.

And the answer to your question in post #22 is also yes (in case you missed it). :)

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