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All Board Members except for One Resigned


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This case is complicated.  It is related to the Registry of Interpreters for the Deaf (RID) which has 15,000 members.  During its conference two weekends ago, a little over 400 members attended the conference through Zoom webinar.  To meet a quorum, there needs to be 200 or more members present.

On May 27, 2021, the members re-elected the officers and members-at-large for another term which starts on September 1, 2021.  The election took place by e-mail voting.  The President won by receiving 962 43.5% votes.  The 2nd place was 854 38.6 votes and third was 395 17.9% votes. Of the 15,000 plus members, only 2,211 voted.

A short time later, according to the President, he received personal attacks by a few of RID's most vocal, and sadly toxic, members. For that reason, on June 17, 2021, he decided not to continue another term as President and his resignation will become effective on September 1, 2021.  A few days later, all the officers and members at large except for one, announced their resignations effective September 1, 2021.  

So, beginning on September 1st, RID will have only one board member (MAL).

First, I checked the California Nonprofit Statute on Board resignations.  Here is what it says:

 

STATUTE

Universal Citation: CA Corp Code § 5224 (2013)

(c) Any director may resign effective upon giving written notice to the chairman of the board, the president, the secretary or the board of directors of the corporation, unless the notice specifies a later time for the effectiveness of such resignation. If the resignation is effective at a future time, a successor may be elected to take office when the resignation becomes effective.

The bylaws state:

 

Article IV. DIRECTORS

Section 7. Vacancies

Vacancies of the Board of Directors are created upon the death, resignation, incapacitation, or removal of any Director due to legal action or for cause against the Director. Additionally, a vacancy will be created when a Region Representative moves from one region to another more than six (6) months prior to the completion of their term. This situation would require the Representative’s immediate resignation.

A. Removal of Directors: The Board of Directors may declare vacant any office for which the Director has been removed due to legal action or for cause as detailed in Robert’s Rules of Order Newly Revised. A decision for removal of a Director must be approved by three-fourths (¾) of the Board of Directors present and voting. Notification shall be given to the entire Board of Directors at least seven (7) days prior to such a meeting.

B. Appointment to Fill a Vacancy:

a) In case of vacancy of the President, the Vice President automatically become President for the unexpired term.

b) In case of vacancy of the Vice President, Secretary, Treasurer, Members-at-Large, or Regional Representatives with less than one (1) year remaining in the term, the office may be filled by the affirmative vote of a majority of the remaining Directors. A Director appointed to fill a vacancy shall be appointed for the unexpired term of their predecessor’s office. If the unexpired term is more than one year, a special election must be held within six months of the vacancy. Until such elections occur, a person may be appointed to the vacant office by an affirmative vote of a majority of the remaining Directors.

Article VI. MEETINGS OF MEMBERS

The time and place of general membership biennial meetings will be designated by the Board of Directors with a written notice given to the membership at least nine (9) months prior to the meeting. Special membership meetings may be called at any time by the Board of Directors or by written petition sent to the Board of Directors from a minimum of ten percent (10%) of the voting members of the corporation. Written notice of the time and place of special meetings shall be given at least two (2) months prior to the meeting. A quorum to conduct business at biennial and special meetings shall consist of no less than two hundred (200) voting members.

There are 11 board members plus the past president who serves in an ex-officio non-voting capacity for one term.  

________________________________________________________________________________________________________________________

I think this is an unique case and I am sure that some of you experienced this in the past.  It looks like the organization will be without a board for two months.  Some members are asking for the call of a special election.   A special election by the board must be held within six months of the vacancy. But, the board will be gone once the timing starts.  Any thoughts?

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Mark, you have a lot packed into this question, far more than I can respond to in the few minutes I have available at the moment.  For now, I'll just make a couple of observations and maybe ask a couple of questions.

First, it seems to me that until September 1, you have a full  board of directors.  I'm thinking they can call a special  meeting of the board and/or membership.

Second, based on the excerpt from state law, it appears that resignations do not need to be accepted, but are effective upon receipt. 

Third, after September 1 (or as of September 1), you will still have a board of directors, but it will  consist of one person.  The way I read the bylaws, the remaining members of the board may fill vacancies.  Therefore, it seems to me that this one director, being the only remaining member of the board, might be entitled to fill the vacancies because he alone will constitute 100 percent of the board for at least some period of time.  I'm assuming there is no language anywhere defining a quorum of the board as a fixed number or as a percentage of the "fixed"or authorized membership of the board.  Ultimately,  that is probably a matter of bylaws interpretation. BTW,  even if this one director might be able to fill the other ten vacancies, it might be best if he does not  fill all of them himself.

One more comment/question:  Do your bylaws or some provision of state law permit holding the biennial meeting electronically and voting via email?  If not, that is a problem.

I also have a question:  You said the president was elected with 43.5 percent of the votes.  Do the bylaws provide that the president can be elected by plurality vote?   RONR provides that officers cannot be elected with a plurality vote unless the bylaws specifically provide for it. 

That's going to have to do it for now. 

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5 hours ago, Richard Brown said:

Third, after September 1 (or as of September 1), you will still have a board of directors, but it will  consist of one person.  The way I read the bylaws, the remaining members of the board may fill vacancies.  Therefore, it seems to me that this one director, being the only remaining member of the board, might be entitled to fill the vacancies because he alone will constitute 100 percent of the board for at least some period of time.  I'm assuming there is no language anywhere defining a quorum of the board as a fixed number or as a percentage of the "fixed"or authorized membership of the board.  Ultimately,  that is probably a matter of bylaws interpretation. BTW,  even if this one director might be able to fill the other ten vacancies, it might be best if he does not  fill all of them himself.

I would add that the bylaws appear to provide that the persons appointed in this manner shall only temporarily fill the vacancies in the circumstances described, and that a special election by the membership must be held.

6 hours ago, Mark Apodaca said:

If the unexpired term is more than one year, a special election must be held within six months of the vacancy. Until such elections occur, a person may be appointed to the vacant office by an affirmative vote of a majority of the remaining Directors.

 

6 hours ago, Mark Apodaca said:

I think this is an unique case and I am sure that some of you experienced this in the past.  It looks like the organization will be without a board for two months.  Some members are asking for the call of a special election.   A special election by the board must be held within six months of the vacancy. But, the board will be gone once the timing starts.  Any thoughts?

I don't think it is necessary to wait until the vacancies occur to call the special election. It would seem to me that it is in order (and desirable) to call a special meeting as soon as possible.

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2 hours ago, Josh Martin said:

I don't think it is necessary to wait until the vacancies occur to call the special election. It would seem to me that it is in order (and desirable) to call a special meeting as soon as possible.

I agree. In fact, the statute appears to provide for this. It is also permissible under the rules in RONR as I interpret them.

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3 hours ago, Mark Apodaca said:

If the resignation is effective at a future time, a successor may be elected to take office when the resignation becomes effective.

It sounds like you are reading this to mean that they have to wait until the resignation is effective in order to set the special meeting. I do not read this to say that. The current board of directors can, as of today, set up a special meeting (or a special election if they are able to do the election outside of a meeting).

I would also check to see what the statute says about quorum for the board of directors. I have seen corporate statutes that define quorum based on the the number of positions rather than the number of members, and then put in provisions about what to do if the number of directors falls below that number.

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Hi Richard,

My thoughts and/or reply is in purple.

First, it seems to me that until September 1, you have a full  board of directors.  I'm thinking they can call a special  meeting of the board and/or membership.  The board can call a special meeting.  Here is what the bylaws state:

B. Other Regular Meetings: Other regular meetings of the Board of Directors shall be held on a quarterly basis at such time and place as fixed by the Board of Directors. Announcement shall be provided to membership at least sixty (60) days prior to such meetings.
C. Special Meetings: These may be called by the President or by any two (2) Directors, with a majority vote of approval by the Board of Directors. Notification shall be given to the entire Board of Directors at least seven (7) days prior to such a meeting.  

From reading C, the membership does not need to be notified.  I see it in "B".   I do not believe that the board would want to call a special meeting to appoint new board members after what happened.  Also as mentioned above, there must be a vacancy first.  There won't be any vacancies until September 1st.  

If the unexpired term is more than one year, a special election must be held within six months of the vacancy. Until such elections occur, a person may be appointed to the vacant office by an affirmative vote of a majority of the remaining Directors.

Second, based on the excerpt from state law, it appears that resignations do not need to be accepted, but are effective upon receipt. 

State law, as I read it above, requires written notice.  Each board member stated verbally (sign language) that their last day will be August 31.  The last time I spoke with the CEO, I asked if the resignations were received and they were not.  I just followed up with her for the status.

Third, after September 1 (or as of September 1), you will still have a board of directors, but it will  consist of one person.  The way I read the bylaws, the remaining members of the board may fill vacancies.  Therefore, it seems to me that this one director, being the only remaining member of the board, might be entitled to fill the vacancies because he alone will constitute 100 percent of the board for at least some period of time.  I'm assuming there is no language anywhere defining a quorum of the board as a fixed number or as a percentage of the "fixed" or authorized membership of the board.  Ultimately,  that is probably a matter of bylaws interpretation. BTW,  even if this one director might be able to fill the other ten vacancies, it might be best if he does not  fill all of them himself.  Quorum requires majority of the board.  I don't think he would want to take the task of appointing 10 positions.  

Section 9. Quorum
A majority of the Board of Directors are required to attend in order to constitute a quorum.

One more comment/question:  Do your bylaws or some provision of state law permit holding the biennial meeting electronically and voting via email?  If not, that is a problem.

I did not find anything in the bylaws covering this.  I even shared a law firm's website related to the video conferencing (Zoom) https://www.hollandnonprofitlaw.com/holding-a-virtual-member-or-board-meeting but the president was unresponsive to it.

I also have a question:  You said the president was elected with 43.5 percent of the votes.  Do the bylaws provide that the president can be elected by plurality vote?   RONR provides that officers cannot be elected with a plurality vote unless the bylaws specifically provide for it.  There is nothing in the bylaws covering plurality vote.

I looked at the policy and procedures manual covering nominations and board vacancies:

1. Call for nominations
1.1. A call for nominations, stating and describing the offices open for election, and the nominations and elections procedures shall be published on the RID website no later than February first (1st). Nominations shall be returned, following the published process and guidelines, no later than April first (1st).
1.2. A call for nominations is generated by the nominations committee annually, or when necessary based on vacancy (see special election). In even-numbered years, the call is for nominations for region representatives. In odd-numbered years, the call is for nominations for officers. An example of the call for nominations can be found in Appendix E.13. All nomination packets must be received by the nominations committee no later than April 1.
1.3. Members of the Board of Directors shall refrain from actively recruiting candidates for board vacancies prior to those vacancies becoming public knowledge.

Board Vacancies
1. A vacancy that occurs in any board position is considered officially vacant on the first of the month following the announcement of vacancy. The process to fill a vacancy is outlined in the bylaws (Article IV. Directors, Section 7-Vacancies).
2. The process to fill vacancies with more than one year left on the term shall defer to the association bylaws with the following deadlines:
2.1. The last day of the third month from the official vacancy will be the last day postmarked nominations will be processed by the national office, and be counted toward the requisite number required for a candidate's nomination.
2.2. The last day of the fifth month of the official vacancy will be the last day postmarked ballots will be processed by the national office for an election to fill an official vacancy.

This is probably one of the most challenging cases.  After the entire board decided to resign, a number of organizations contacted me asking if they should place something in their bylaws covering what will happen if the entire board resigns.

Mark

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15 hours ago, Josh Martin said:

I would add that the bylaws appear to provide that the persons appointed in this manner shall only temporarily fill the vacancies in the circumstances described, and that a special election by the membership must be held.

I am not sure about temporarily fill the vacancies because the bylaws specify how it needs to be done.  I don't think the bylaws permit this.  My thought.

15 hours ago, Josh Martin said:

I don't think it is necessary to wait until the vacancies occur to call the special election. It would seem to me that it is in order (and desirable) to call a special meeting as soon as possible.

But Josh, the bylaws give timelines for calling a special meeting to hold an election.  It is a long process.  The policy and procedures which I obtained state the following:

Special Elections
The Board of Directors will determine the need to hold a special election in order to fill a vacancy on the Board. Once determined, the Board President calls upon the nominations committee to convene and begin their process. A special election can be called, as needed, at any point during the year.
The process of a special election follows the same process as a regular election with the exception of dates. During a special election, dates may be shortened or extended in comparison to the regular nominations and elections period as is deemed appropriate for the special election.

Nominations
The nominations and elections process for positions on the RID Board of Directors is conducted by the Nominations and Elections Committee One member of the Board of Directors will serve as the liaison between the committee and the Board. The Board of Directors typically does not receive information and updates as to the results of an election until it is released to the membership but may receive information just prior out of courtesy.
The process is as follows:
1. Call for nominations
1.1. A call for nominations, stating and describing the offices open for election, and the nominations and elections procedures shall be published on the RID website no later than February first (1st). Nominations shall be returned, following the published process and guidelines, no later than April first (1st).
1.2. A call for nominations is generated by the nominations committee annually, or when necessary based on vacancy (see special election). In even-numbered years, the call is for nominations for region representatives. In odd-numbered years, the call is for nominations for officers. An example of the call for nominations can be found in Appendix E.13. All nomination packets must be received by the nominations committee no later than April 1.
1.3. Members of the Board of Directors shall refrain from actively recruiting candidates for board vacancies prior to those vacancies becoming public knowledge (93.0340).
2.Publication of Candidate Statement
2.1. Each candidate will be asked to submit a professional headshot and a statement of intent (produced both in ASL and written English). The statement of intent video should be no longer than 4 minutes in length. Requested materials should be submitted no later than April 5th. Materials will be posted to the RID website no later than April 15th.

Sometimes I believe that the organization is making things more complicated when it comes to the policy and procedure.

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10 hours ago, Atul Kapur said:

It sounds like you are reading this to mean that they have to wait until the resignation is effective in order to set the special meeting. I do not read this to say that. The current board of directors can, as of today, set up a special meeting (or a special election if they are able to do the election outside of a meeting).

I would also check to see what the statute says about quorum for the board of directors. I have seen corporate statutes that define quorum based on the the number of positions rather than the number of members, and then put in provisions about what to do if the number of directors falls below that number.

Yes, it is how I read it.  Yes, the board can call for a special meeting but it is the timelines as stated in the bylaws and policy which concern me.

Quorum of the board:

(7) A majority of the number of directors authorized in or pursuant to the articles or bylaws constitutes a quorum of the board for the transaction of business. The articles or bylaws may require the presence of one or more specified directors in order to constitute a quorum of the board to transact business, as long as the death or nonexistence of a specified director or the death or nonexistence of the person or persons otherwise authorized to appoint or designate that director does not prevent the corporation from transacting business in the normal course of events. The articles or bylaws may not provide that a quorum shall be less than one-fifth the number of directors authorized in or pursuant to the articles or bylaws, or less than two, whichever is larger, unless the number of directors authorized in or pursuant to the articles or bylaws is one, in which case one director constitutes a quorum.

Quorum of the members:

 

Universal Citation: CA Corp Code § 5512 (2013)

(a) One-third of the voting power, represented in person or by proxy, shall constitute a quorum at a meeting of members, but, subject to subdivisions (b) and (c), a bylaw may set a different quorum. Any bylaw amendment to increase the quorum may be adopted only by approval of the members (Section 5034). If a quorum is present, the affirmative vote of the majority of the voting power represented at the meeting, entitled to vote, and voting on any matter shall be the act of the members, unless the vote of a greater number or voting by classes is required by this part or the articles or bylaws.

(b) Where a bylaw authorizes a corporation to conduct a meeting with a quorum of less than one-third of the voting power, then the only matters that may be voted upon at any regular meeting actually attended, in person or by proxy, by less than one-third of the voting power are matters notice of the general nature of which was given, pursuant to the first sentence of subdivision (a) of Section 5511.

(c) Subject to subdivision (b), the members present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment notwithstanding the withdrawal of enough members to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the members required to constitute a quorum or, if required by this division or the articles or the bylaws, the vote of a greater number or voting by classes.

(d) In the absence of a quorum, any meeting of members may be adjourned from time to time by the vote of a majority of the votes represented either in person or by proxy, but no other business may be transacted, except as provided in subdivision (c).

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1 hour ago, Mark Apodaca said:

Also as mentioned above, there must be a vacancy first.  There won't be any vacancies until September 1st.  

As I said earlier, I disagree completely with this. Once the written notices of resignations are received, the board members are free to start the process to fill the upcoming vacancies.

And, based on this non-lawyer's interpretation of what you've provided above, one board member is not quorum.

51 minutes ago, Mark Apodaca said:

Quorum of the board:

(7) A majority of the number of directors authorized in or pursuant to the articles or bylaws constitutes a quorum of the board for the transaction of business.

As I suspected, this means a majority of the number of director positions rather than the number of actual bodies in those positions. So the one remaining member of the board will not satisfy the quorum requirement (again, I am not a lawyer so you should advise the organization to have a lawyer review this).

You should also advise them to see what the statute says about how to proceed if it turns out that they end up with fewer board members than their quorum, which is either 6 or 7 (depending on whether the past-president is considered a member of the board for quorum purposes).

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9 hours ago, Mark Apodaca said:

But Josh, the bylaws give timelines for calling a special meeting to hold an election.  It is a long process.  The policy and procedures which I obtained state the following:

The bylaws provide that the special meeting must be called at least sixty days before the meeting. There are also procedures relating to nominations, but those procedures provide that "During a special election, dates may be shortened or extended in comparison to the regular nominations and elections period as is deemed appropriate for the special election." The fact that the organization will soon be down to one board member seems like a pretty good reason why it should be "deemed appropriate" to shorten those procedures.

So my advice (assuming the board is willing to do this) would be for the board, as soon as possible, to take the following actions:

  • Meet and call a special meeting and special election. Because the special election will not occur until after the vacancies exist, I don't see any problem. I would advise sticking as close to the minimum of 60 days as possible.
  • Adopt shortened nomination procedures so they can be completed in this timeframe. Conduct those procedures.
  • Fill the vacancies.

If the board refuses to perform its duties in this matter, then I would advise the organization to seek legal counsel. Based upon the additional facts, it appears that the board may not be able to obtain a quorum after the resignations take effect, which would mean it would be impossible to conduct the procedures to call a special meeting and special election provided for in the bylaws. As a result, any recourse would need to be found in applicable law.

Edited by Josh Martin
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Atul,

I read you.  Here are my thoughts:

  1. Each board member must submit their resignations in writing per California Nonprofit Organization statute if they have not done so.
  2. Because of the limited time, the President shall call for a special board meeting for the purpose of special elections.
  3. Dates for submitting interest, voting, announcing the winners shall be established.
  4. Nominating and Elections Committee established.  Same functions as before.  May wish to ask the members of the committee who originally served, to serve again.
  5. Members have five days to place their ballots.
  6. Majority required, not plurality vote since the bylaws do not state plurality.
  7. New board starts on September 1st.

Any additional thoughts?  I don't wish to violate the bylaws or policy and procedures.  This is an unique case.

Mark

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9 minutes ago, Josh Martin said:

The bylaws provide that the special meeting must be called at least sixty days before the meeting. There are also procedures relating to nominations, but those procedures provide that "During a special election, dates may be shortened or extended in comparison to the regular nominations and elections period as is deemed appropriate for the special election." The fact that the organization will soon be down to one board member seems like a pretty good reason why it should be "deemed appropriate" to shorten those procedures.

So my advice (assuming the board is willing to do this) would be for the board, as soon as possible, to take the following actions:

  • Meet and call a special meeting and special election. Because the special election will not occur until after the vacancies exist, I don't see any problem. I would advise sticking as close to the minimum of 60 days as possible.
  • Adopt shortened nomination procedures so they can be completed in this timeframe. Conduct those procedures.
  • Fill the vacancies.

If the board refuses to perform its duties in this manner, then I would advise the organization to seek legal counsel. Based upon the additional facts, it appears that the board may not be able to obtain a quorum after the resignations take effect, which would mean it would be impossible to conduct the procedures to call a special meeting and special election provided for in the bylaws. As a result, any recourse would need to be found in applicable law.

Thank you Josh.  Looks like our comments crossed at nearly the same time.  The 60 day minimum will need to be followed, but the process is established.  I will ask if the organization has legal counsel in California.  Organization headquarters is in Virginia but incorporated in California.

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17 minutes ago, Josh Martin said:

Meet and call a special meeting and special election. Because the special election will not occur until after the vacancies exist, I don't see any problem. I would advise sticking as close to the minimum of 60 days as possible.

Josh, do you mean 7 days as stated in the bylaws for special meetings?

B. Other Regular Meetings: Other regular meetings of the Board of Directors shall be held on a quarterly basis at such time and place as fixed by the Board of Directors. Announcement shall be provided to membership at least sixty (60) days prior to such meetings.
C. Special Meetings: These may be called by the President or by any two (2) Directors, with a majority vote of approval by the Board of Directors. Notification shall be given to the entire Board of Directors at least seven (7) days prior to such a meeting.  

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23 hours ago, Mark Apodaca said:

Josh, do you mean 7 days as stated in the bylaws for special meetings?

B. Other Regular Meetings: Other regular meetings of the Board of Directors shall be held on a quarterly basis at such time and place as fixed by the Board of Directors. Announcement shall be provided to membership at least sixty (60) days prior to such meetings.
C. Special Meetings: These may be called by the President or by any two (2) Directors, with a majority vote of approval by the Board of Directors. Notification shall be given to the entire Board of Directors at least seven (7) days prior to such a meeting.  

I was referring to the notice required to call the special meeting of the membership. I agree that, based upon the rules provided, only seven days of notice is required to call the special meeting of the board.

On 7/19/2021 at 11:11 PM, Mark Apodaca said:

The time and place of general membership biennial meetings will be designated by the Board of Directors with a written notice given to the membership at least nine (9) months prior to the meeting. Special membership meetings may be called at any time by the Board of Directors or by written petition sent to the Board of Directors from a minimum of ten percent (10%) of the voting members of the corporation. Written notice of the time and place of special meetings shall be given at least two (2) months prior to the meeting. A quorum to conduct business at biennial and special meetings shall consist of no less than two hundred (200) voting members.

 

Edited by Josh Martin
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Gents,

I am planning to draft my opinion on this case and would like to share it with you.  Last night, I asked the President to have the board (including himself) to submit their resignations in writing as required by state statute even though each made a vlog.  I also asked the President to call a special board meeting which will focus on the special election.   RID has an attorney who specializes in NPO's and the opinion will be shared with him on Monday.

Mark 

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