No nominations so no board elections. Do term-limited board members stay on?

[guest user]

We have a nominating committee of two board members who are term limited and are supposed to leave the board. We are supposed to hold board elections in June but they did not find anyone to serve on the board (they did not reach out to the one person who was nominated). Once we hold board elections, the new board votes for the officers. However, because there was no general board election, the term-limited board members want to stay on and vote for the officers. There are nine people on the board at this point and by them staying on, their slate wins.

We had a board meeting with six out of the nine board members and voted to continue with seven board members - 6 votes yes, 1 abstained. Would this necessarily mean that the two term-limited members would roll off and the remaining seven would vote for the officers? This would be a 4-3 split in this case which is why the board of nine did not want this.

Instead, the two term-limited board members stayed on and voted off the first general board member for conflict of interest which did not allow that member to vote so they were voted off by 5-3. Next, the board voted off two more members for cause.

The by-laws state that "Directors shall serve xxx, and until a successor is duly elected..." Do the two members whose terms are supposed to end, stay on because there was no election and so no one was "duly elected?" Or did they necessarily roll off of the board because the board voted to move forward with seven members before the vote that removed three of the members?

Also, this group has lost their non-profit status so can the board even make these decisions if they are not functioning as a non-profit?

Edited July 25, 2021 at 12:26 AM by guest user

[Gary Novosielski]

If your bylaws say that officers serve for x time "or until their successors are elected" then they would stay in place until you can complete your election.   However declaring someone to have a conflict of interest or voting off "for cause" are not supported by RONR.  It sounds like the board might be inventing powers for themselves that they do not actually possess.

The fact that there were no nominations does not relieve you of your duty to hold the elections as specified in the bylaws.  If your bylaws give the board the power to fill vacancies, then you can temporarily appoint replacements, but since these are not mid-term vacancies, those appointed do not serve for the full unexpired term.  They only serve until you complete your election, which you still must do.

You might want to light a fire under your nominating committee, which needs to be more persuasive.  Why did they not speak to the one nominee?  If you are not getting any volunteers to step forward, it may be time to talk about dissolving the organization.

Speaking of which there are IRS regulations about how the assets of a (former) non-profit may be distributed.  For instance if you have a bank account, you can't just split it up amongst the members, but must dispose of it to non-profit entities.  But I'm not a lawyer, so you'll need to contact one for details.  You don't want to end up in trouble with the IRS.

 

[guest user]

Thank you for your response. The by-laws say "AND until a successor is duly elected..." But again, directors are supposed to be chosen at the annual membership meeting. We had neither the annual membership meeting nor elections. The question is: do the two board members whose terms ended stay on the board? We voted to continue with seven board members once it was determined that there would be no election - meaning, the two are relieved of their duty. Is this valid? Does this mean that their term has ended? 

Here is the language:

"Elections for expiring Director positions shall be held at the Annual Meeting of the Membership each year...Directors shall serve three years, and until a successor is duly elected, unless they resign or are removed, with approximately one-third (1/3) of the Directors’ terms expiring each year."

Thank you.

 

[Gary Novosielski]

It is likely that the vote to continue with fewer board members was not in order, since it would conflict with the bylaws.

Also, there is no way to "determine that there will be no election".  That would also conflict with the bylaws.

You still need to hold your Annual Meeting and hold the election as soon as possible.