Elections when annual meeting is cancelled due to covid

[Guest Chris]

Our association elects our Board of Directors at the annual meeting. They hold their positions for one year or until their successors are elected.

The BOD is fully authorized to run the association during the year, has the power to fill a vacated position of the BOD and can meet electronically.

Our annual meeting, where we elect the BOD, has been cancelled because of covid-19 and is unlikely to be rescheduled this year. There is no provision in the bylaws for the annual meeting to take place electronically.

Is there a way to proceed with electing the next Board of Directors?

• Can the current BOD call an emergency meeting, appoint the next BOD to their positions and ratify this whenever the association can hold an annual meeting?
• Does everyone need to resign, one-at-a-time from the top down and have the BOD replace each person with the next person?
• Can the association hold the annual meeting by Zoom, elect the Board of Directors, and ratify later under RONR,11th ed., p 124, ll 34-35: to later ratify "action taken by officers, committees, delegates or subordinate bodies in excess of their instructions or authority."?
• Can a Zoom meeting (with audio, video and opportunity for full discourse by all members) be considered meeting in "one room or area" , since all members can be on-screen with full audio and video at the same time?

Thanks for your interpretations.

Chris

[Rob Elsman]

From the facts you have provided, your officers will remain in office, and can continue to perform their duties.  I am more concerned about the cancellation of the annual meeting.  This sentence is written in the "agentless passive voice", so I am unable to determine who did the cancelling.  Does the source of the cancellation have authority to cancel meetings?  If not, the meeting should proceed, even if it is likely that a quorum will not be achieved.

[J. J.]

Unless your bylaws permit the meeting to be cancelled, it cannot be. 

Unless your bylaws say otherwise, you cannot have a Zoom meeting.

[Dan Honemann]

The short answer to all four of the questions you have asked appears to be "no." 

With respect to your second question, the answer is "no" because everyone does not "need" to resign. However, members of the board may resign if they wish to do so, in which event the board, you tell us, does appear to have the power to accept the resignation and fill the vacancy thus created.

[Richard Brown]

1 hour ago, Guest Chris said:

Our annual meeting, where we elect the BOD, has been cancelled because of covid-19 and is unlikely to be rescheduled this year. There is no provision in the bylaws for the annual meeting to take place electronically.

Perhaps a minor detail and perhaps not so minor, but was the annual meeting actually canceled or was it simply never scheduled?   Do the bylaws specify the date, time and place of the annual meeting or do they merely say something along the lines that "The annual meeting shall take place in the month of June at a date, time and place to be determined by the board of directors"?   Perhaps it will help if you provide us with the exact wording of your bylaw provision regarding the date, time and place of the annual meeting.  Please quote exactly, don't paraphrase.

[Guest Chris]

Thank you for your helpful replies.

To answer your questions:

Bylaws say: "A meeting of the association shall be held annually at a time and place designated by the Board of Directors for the election of officers and directors, for the receiving of annual reports, and for any other business that may come regularly before the association. The annual meeting of the association should take place at the expected largest event of the association, which is intended to be the Carolina Photo Expo." (Both the Carolina Photo Expo and the annual meeting were cancelled due to covid-19 restrictions.)

Bylaws say: "The Board of Directors shall have general supervision of all the interests of this association, shall meet at such times as may be specified by the President or in the Special Rules of Order for the purpose of considering such questions as may be brought before it, and shall carry out all programs as may be approved by the members for the attainment of the objectives of this association. They shall provide a place and arrange for the annual meeting of this association."

The Board cancelled the Carolina Photo Expo and did not schedule the annual meeting because of covid-19 restrictions on gathering in person. Our state is currently at no more than 25 persons in a gathering indoors.

Question: If we can't meet in person for the annual meeting in numbers that give us a quorum (requires 54 people), how do we hold an annual meeting and have elections?

Thanks,

Chris

 

[Rob Elsman]

This is a conundrum many organizations are facing during this unusual time.  One possible solution is to schedule the annual meeting in Virginia or South Carolina.  Otherwise, I do not see a solution that is both safe and acceptable under the rules you have given to us and RONR.

[Guest Chris]

Thanks. This is becoming more clear.

Our bylaws state, "A meeting of the association shall be held annually at a time and place designated by the Board of Directors for the election of officers and directors." If the BOD designates a date, time and place for the annual meeting and gives proper notice, then they have fulfilled their legal duty even if there is not a quorum because we can't meet with more than 25 people indoors right now. In this case, the meeting would have been scheduled, but business can't be transacted.

 Then could we complete the election by written ballot according to NC Nonprofit Corporation Act, Chapter 55A-7-08? 

"§ 55A-7-08. Action by written ballot.

(a) Unless prohibited or limited by the articles of incorporation or bylaws and without regard to the requirements of G.S. 55A-7-04, any action that may be taken at any annual, regular, or special meeting of members may be taken without a meeting if the corporation delivers a written ballot to every member entitled to vote on the matter. Any requirement that any vote of the members be made by written ballot may be satisfied by a ballot submitted by electronic transmission, including electronic mail, provided that such electronic transmission shall either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the member or the member's proxy."

 

Thanks,

Chris

[Rob Elsman]

You're off to your favorite attorney. 

[Josh Martin]

16 hours ago, Guest Chris said:

Thanks. This is becoming more clear.

Our bylaws state, "A meeting of the association shall be held annually at a time and place designated by the Board of Directors for the election of officers and directors." If the BOD designates a date, time and place for the annual meeting and gives proper notice, then they have fulfilled their legal duty even if there is not a quorum because we can't meet with more than 25 people indoors right now. In this case, the meeting would have been scheduled, but business can't be transacted.

 Then could we complete the election by written ballot according to NC Nonprofit Corporation Act, Chapter 55A-7-08? 

"§ 55A-7-08. Action by written ballot.

(a) Unless prohibited or limited by the articles of incorporation or bylaws and without regard to the requirements of G.S. 55A-7-04, any action that may be taken at any annual, regular, or special meeting of members may be taken without a meeting if the corporation delivers a written ballot to every member entitled to vote on the matter. Any requirement that any vote of the members be made by written ballot may be satisfied by a ballot submitted by electronic transmission, including electronic mail, provided that such electronic transmission shall either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the member or the member's proxy."

As others have pointed out, the annual meeting must still be held. As you say, it will not be possible to obtain a quorum. Even if one person shows up, however, this still satisfies the requirement of holding the meeting, even although the assembly won't be able to do much business (such as elections) at such a meeting. The meeting could even be held at that person's home. The assembly can still take certain actions, however, such as adopting a motion to establish an adjourned meeting to meet at the call of the president (or the board, if the board can meet electronically). I advise this as opposed to setting a specific date, since it is not known at this time when it will be safe for the organization to meet again. (Alternately, the meeting could just be immediately adjourned.)

The second question is what to do about the elections. Your bylaws provide that the board members "hold their positions for one year or until their successors are elected." They also provide that the board has "the power to fill a vacated position of the BOD and can meet electronically." Based on these facts, the proper solution to this problem so far as RONR is concerned is as follows:

1) The board members currently in office continue serving.

2) None of the board members are required to resign, but if they do so, the board can fill the resulting vacancies.

One possible solution to still involve the membership would be to informally gather the opinions of the membership by some means, whether by a ballot or through an informal electronic meeting, with the understanding that the board will take those opinions into account in having board members resign and replacing them with people chosen by members through these means. Since these are informal, however, such choices are not binding upon the board.

There may also be a solution through North Carolina law, but that is a question for an attorney, not for this forum.

Edited June 14, 2020 at 06:47 PM by Josh Martin

[Guest Chris]

Thanks to all who responded. Your interpretations have been helpful.

 

Stay well,

Chris