Parliamentary laws for making Articles of Incorporation amendments

[Dave H]

Recently a non profit member organization with a corporate staff, was presented with legally submitted bylaws.  A minority of the Board members supported the bylaw changes which require a vote by membership to be passed per the AOI and existing Bylaws.  The corporate staff objected to the amendments and the Board chair is also in opposition to the proposed bylaw amendments.  Due to the covid concerns the amendments were placed on tolling until they were to be discussed at a regularly scheduled board meeting.

At that board meeting, a new set of amendments to both the Articles of Incorporation and Bylaws were submitted by the Chair, who also had the vote of the majority of board members (a 5 to 4 majority).  Those presented amendments were presented without any knowledge of the board members in the minority.  They were voted on at that meeting and passed by the 5-4 vote of board.  The Chair was also in favor.

The original Bylaws stated that proceeding would be conducted in accordance with Roberts Rules of Order.  The new ones state that proceeding will be conducted by "rules of procedure as determined by the Chairperson."  My question is were Roberts Rules of Order broken when keeping a minority share of Board members uninformed prior to a vote on Articles of Incorporation amendments?

[George Mervosh]

Since bylaw changes require a vote by the membership according to your facts, why is the board voting on proposed amendments at all?

[Dave H]

The Board first changed the Articles to apparently justify their vote to change the bylaws.  It is a convoluted situation and likely not done.  However in their changes they removed the Roberts Rules as a basis for proceedings and the action of keeping the minority share of board completely in the dark before the presentation and vote at the same meeting, made me wonder if there was a parliamentary proceeding that was not followed.

 

[Richard Brown]

38 minutes ago, Dave H said:

The Board first changed the Articles to apparently justify their vote to change the bylaws.  It is a convoluted situation and likely not done. . . .

Before we.... or anyone else.... can help you, it will be necessary to know the EXACT situation regarding the  Corporate Charter (Articles of Incorporation) both before and after the alleged amendments and the EXACT language of the bylaws prior to their supposed amendment by the board and exactly how both changes came about.

RPNR contains very explicit provisions regarding the process for amending bylaws, but any amendment provisions in your own articles of incorporation and bylaws trump whatever is in RONR.

[Josh Martin]

1 hour ago, Dave H said:

My question is were Roberts Rules of Order broken when keeping a minority share of Board members uninformed prior to a vote on Articles of Incorporation amendments?

The requirements for amending the articles of incorporation are based upon the rules in applicable law and any limitations in the charter itself. RONR has no rules regarding amending articles of incorporation, since this document is a legal instrument and the rules for amending it will vary depending upon the jurisdiction the organization is incorporated in.

So no, no rule in Robert's Rules of Order was violated, however, it may be that some rule in the Articles of Incorporation or applicable law (both of which take precedence over Robert's Rules of Order) was violated. I would check to see whether those rules require that notice be given of amendments to the articles. It would also seem prudent to check whether the board is authorized to amend the articles at all.

"The Corporate Charter (in different states variously called the Certificate of Incorporation, Articles of Incorporation, Articles of Association, etc.) is a legal instrument that sets forth the name and object of the society and whatever other information is needed for incorporating the society under the laws of the particular state—or under federal law in the case of a few special types of organizations." RONR (12th ed.) 2:5

"Any later amendments (that is, changes in the charter) are subject to the requirements of law and any limitations placed in the charter itself." RONR (12th ed.) 2:6

45 minutes ago, Dave H said:

The Board first changed the Articles to apparently justify their vote to change the bylaws.

Is the board authorized to amend the articles of incorporation?

45 minutes ago, Dave H said:

However in their changes they removed the Roberts Rules as a basis for proceedings and the action of keeping the minority share of board completely in the dark before the presentation and vote at the same meeting, made me wonder if there was a parliamentary proceeding that was not followed.

It may well be that there is a proceeding that was not followed, but the relevant procedures in this case are to be found in the articles of incorporation and applicable law, not RONR.

Edited December 23, 2020 at 05:14 PM by Josh Martin

[Dave H]

Thank you for your replies.  As I said it is a complicated issue and there is no clear cut avenue for the Board to unilaterally change Articles and especially bylaws.  It refers back to statutes that, in plain language-not to be confused with how it is legally interpreted, says, members of non stock companies are the same as stockholders in stock companies.  Statutes also describe stockholders as voting on amendments to AOI.  That is all stuff that will have to be worked out in court, if it goes there.

I was more wondering about the conduct during the process, where 40% of the Board of Directors were kept completely in the dark about the formation, preparation, and presentation of AOI amendments until the meeting upon which they were voted upon. On the surface it appears if there were some clandestine, "semi" board meeting for all the article amendments to be worked out ahead of the meeting.

[Josh Martin]

24 minutes ago, Dave H said:

Thank you for your replies.  As I said it is a complicated issue and there is no clear cut avenue for the Board to unilaterally change Articles and especially bylaws.  It refers back to statutes that, in plain language-not to be confused with how it is legally interpreted, says, members of non stock companies are the same as stockholders in stock companies.  Statutes also describe stockholders as voting on amendments to AOI.  That is all stuff that will have to be worked out in court, if it goes there.

I was more wondering about the conduct during the process, where 40% of the Board of Directors were kept completely in the dark about the formation, preparation, and presentation of AOI amendments until the meeting upon which they were voted upon. On the surface it appears if there were some clandestine, "semi" board meeting for all the article amendments to be worked out ahead of the meeting.

I would be more concerned with whether the board has the authority to adopt amendments to the articles in the first place. If not, then the issue of whether all members of the board were informed of the action the board lacks the authority to take is moot.

If we for some reason ignore that question, however, then once again the rules pertaining to amending the articles would be found in the articles themselves and in applicable law. It is quite common for such rules to require that all members of the voting body be provided notice of any proposed amendments a specified number of days in advance, but you will need to look to the articles and the laws in question to determine if that is required in this particular instance.