Quorum of Timeshare Board

[Albert]

A timeshare association has voted to set the total number of association board directors at three. The developer, who wrote the bylaws so as to control the non-profit incorporated association, has the ability to appoint to the association Board an outside superior director, the director's director (DD), with "2/3 the voting power of the board" for allowed business purposes. (These purposes may include replacing a treasurer or naming a new management contractor.) The association elects other directors (dd)  for a year but a Board shall act to fill a vacancy until the next annual meeting (without superior voting power by DD). The term of a DD is unstated but developer can appoint him or remove him at any time or leave the position vacant if DD should resign, but where the board determines that a vacancy exist it shall fill the vacancy (until annual meeting).

The documents state: a quorum for action (except filling a vacancy) by the Board as the presence of one-half of the voting power of the Board.

 "During any vacancy in the position of DD, that position shall nevertheless still be deemed to represent is appropriately retained percentage (here 67 percent) of the voting power of the Board for the purpose of determining the presence of a quorum of the Board."

Does the word "presence" signify physical presence and preclude proxy voting or attending by telecommunication at board meeting?  

The meaning of the voting power could be that the DD has 5 votes and the other two directors have one vote each, giving the DD a vote of 5/7 on any decision and each dd one vote. Does this mean that unless the DD appears at any meeting no action is valid?

Is a temporary absence adequate for the board of two to act to fill a vacancy and restore the board count to three?  According to the documents, for filling a vacancy the DD position does not vote anyway to fill vacancies, and two members of three would constitute a quorum who shall  fill any such a new board member until annual meeting.

Would the developer be precluded from adding his DD until the next annual corporate meeting?

 

 

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[Joshua Katz]

1 hour ago, Albert said:

A timeshare association has voted to set the total number of association board directors at three.

What do the bylaws say about the board? Do they leave it up to the membership to decide the size?

 

1 hour ago, Albert said:

The developer, who wrote the bylaws so as to control the non-profit incorporated association, has the ability to appoint to the association Board an outside superior director, the director's director (DD), with "2/3 the voting power of the board" for allowed business purposes.

Setting aside legal issues, from a parliamentary perspective, did these bylaws written by the developer get adopted by the body? (And, one might wonder, why?)

 

1 hour ago, Albert said:

(These purposes may include replacing a treasurer or naming a new management contractor.)

May include? What exactly do the bylaws say? One big issue here - among many - is that, if it's not 100% clear when the DD has this extra voting power, the matter will be decided via the normal point of order and appeal process - but what if there is a dispute about the ability to vote on appeal? (I don't think such a dispute would be dilatory, either - suppose the pending motion is the selection of a new management contractor, a point of order is raised, and the ruling is appealed - it's not clear to me whether the DD has extra voting power on that appeal or not.)

 

1 hour ago, Albert said:

 The documents state: a quorum for action (except filling a vacancy) by the Board as the presence of one-half of the voting power of the Board.

 

Then, in effect, the bylaws come quite close to giving the DD 100% of the voting power of the board, if they allow for special meetings.

1 hour ago, Albert said:

  "During any vacancy in the position of DD, that position shall nevertheless still be deemed to represent is appropriately retained percentage (here 67 percent) of the voting power of the Board for the purpose of determining the presence of a quorum of the Board."

 

I don't quite understand this. Is there a typo somewhere in there?

1 hour ago, Albert said:

 Does the word "presence" signify physical presence and preclude proxy voting or attending by telecommunication at board meeting?  

 

If your rules allow for proxy voting or telecommunication voting, and your rules do not specify the impact on this rule, well...good luck. So far as RONR is concerned, alternative forms of voting are only allowed if allowed by your rules (or if a law says you must allow them), and those rules need to specify the details. However, I know which side any appeals will come out on...

But, to your point, I think it's entirely unclear how much the DD counts toward quorum. Is it his maximum voting power, minimum voting power, an average, or what? These bylaws are a (dictator) mess. The voting power of the DD changes, and by a tremendous amount, from motion to motion. I have no idea how to understand quorum in this context, given the way your bylaws define it.

1 hour ago, Albert said:

 The meaning of the voting power could be that the DD has 5 votes and the other two directors have one vote each, giving the DD a vote of 5/7 on any decision and each dd one vote. Does this mean that unless the DD appears at any meeting no action is valid?

 

Well, it could be read that way, but I don't think it's all that reasonable. (On second though, maybe I'm dense, but I'm not sure where your interpretation comes from - can you explain please?)

Instead, I'd say that if there are a total of 3 directors including the DD, and the DD has the voting power of 2/3 of the board, then the DD has 2 votes and everyone else has one vote. Then a valid meeting can be held without the DD. (But a valid meeting can also be held with only the DD...)

1 hour ago, Albert said:

 Is a temporary absence adequate for the board of two to act to fill a vacancy and restore the board count to three?  According to the documents, for filling a vacancy the DD position does not vote anyway to fill vacancies, and two members of three would constitute a quorum who shall  fill any such a new board member until annual meeting.

 

The paraphrase you provide is not enough to answer this question. (All the relevant language is probably not enough either, but it may come closer.) It's likely there is no answer.

If I were a member of this organization (which I would not be if the bylaws looked like this when I joined) I would want to hold a membership meeting, by whatever procedure the bylaws allow for one (assuming they do), and amend the bylaws to not give a contracted company majority control over the board. Then I'd want to fire the management company for even trying such a thing, most likely.

[Guest Albert]

Bylaws state that members sets the size of the board (between three and nine) at annual meeting and apparently it was last set at three. (The number has not been reset by vote on over ten years. Despite the requirement for a minimum of three, some boards only had two board members, and apparently those boards did not act to increase the board by filling a vacancy.)

Except for filling board vacancies, the DD has “2/3 the voting power of the board’ on motions. Hiring is an important example. I am only reading these procedures and trying to discern if members have any practical powers.

Alternate board participation to having physical presence is not explicit in bylaws. I have heard reports that participants from NC, ME, MA, and PA telephone chat for quarterly meetings. I have not read minutes describing voting on motions. It seems to me that 2/3 might be considered a minimum “power” and if the membership ordained four members to constitute the board,  then allowing each minor Director one vote and the DD six votes would satisfy giving the DD at least 2/3 the voting power of the board, because 6 of 9 is two -thirds. I’m at a loss to understand how the board can act if the DD is absent.  The bylaws allow that if a board proceeds to act absent a quorum, then a motion can be validated if the missing members to constitute a quorum endorse the minutes at some later time.

The Developer Director concept is a creation in the bylaws as written by the timeshare developer for control. He is not a contractor.

I am uncertain about the accepted definition of “board voting power” and how to determine if a motion passes. If a board has three members, and one DD is present and has the majority of the “voting power” does it seem that any decision is either unanimous or else decided by the DD? If, however, the DD has only two votes in the affirmative and the other two members vote in the negative, a given motion probably would not pass. 

 

I reside in Massachusetts where this timeshare is located. Perhaps the Massachusetts Attorney General should assist in deciphering the voting record of the board of this non-profit community association of timeshare owners and also the oversight by trustees to protect the benefits of over 1500 timeshare owners.

 

 

[Joshua Katz]

15 minutes ago, Guest Albert said:

 Except for filling board vacancies, the DD has “2/3 the voting power of the board’ on motions. Hiring is an important example. I am only reading these procedures and trying to discern if members have any practical powers.

 

So this power exists on all motions except filling vacancies? It seems to me, given this additional information, that the "voting power" in the quorum definition, then must include this definition.

17 minutes ago, Guest Albert said:

The Developer Director concept is a creation in the bylaws as written by the timeshare developer for control. He is not a contractor.

 

Sorry, my mistake. Still, what prevents the members from amending the bylaws to take away this control? (Note: there might be an answer to that legally.)

 

19 minutes ago, Guest Albert said:

 I am uncertain about the accepted definition of “board voting power” and how to determine if a motion passes. If a board has three members, and one DD is present and has the majority of the “voting power” does it seem that any decision is either unanimous or else decided by the DD? If, however, the DD has only two votes in the affirmative and the other two members vote in the negative, a given motion probably would not pass. 

 

Since I can see more than one answer - how has the board been doing it? That might be at least persuasive.

20 minutes ago, Guest Albert said:

If a board has three members, and one DD is present and has the majority of the “voting power” does it seem that any decision is either unanimous or else decided by the DD? If, however, the DD has only two votes in the affirmative and the other two members vote in the negative, a given motion probably would not pass. 

Yes, it seems to me that under any configuration and interpretation, the DD has at least veto power (on all votes where he has this special voting power) and usually dictator-power (i.e. the ability to kill or pass any motion). 

 

21 minutes ago, Guest Albert said:

I reside in Massachusetts where this timeshare is located. Perhaps the Massachusetts Attorney General should assist in deciphering the voting record of the board of this non-profit community association of timeshare owners and also the oversight by trustees to protect the benefits of over 1500 timeshare owners.

 

Perhaps a better first step is to talk to an attorney about permissible options. From a parliamentary standpoint, it seems to me, you could amend the bylaws (so long as the bylaws allow for meetings of the members). Check with an attorney to make sure that can be done. If the bylaws do not allow for a membership meeting, an attorney may still be able to advise you on how to use legal mechanisms to change the bylaws. Or it may be that MA law prevents you from getting rid of this DD. In any case, you need to speak to an attorney.