Without a quorum 2 questions

[Tomm]

Here's the first actual situation:

The board is comprised of 9 members. 6 members are required to establish a quorum according to the bylaws.

There are currently 2 vacancies leaving only 7 members and 2 members have now come down with Covid and will not be attending this Thursdays meeting leaving the board with only 5 members.

2 people have already been appointed to the board in an Executive Session to fill the vacancies but have not been officially sworn in. 

Question 1: Can they attend the meeting as board members, making the attendance 7, achieving a the quorum even though they have not been sworn in? 

Question 2: (Hypothetical) If the board experiences a situation where several board members either resigned or passed away leaving the board with less than the required number of members required for a quorum, can the quorum requirements be automatically reduced so that the board can still conduct the business of recruiting or appointing new members?

Bylaws state:

SECTION 3: INSTALLATION OF DIRECTORS At the first Board meeting after a Board of Director has been newly-elected or newly-appointed, the President of the Corporation shall formally install the new Board of Director(s) specifying when their term of office commences.

SECTION 4: LENGTH OF TERMS AND VACANCIES: E. Vacancies occurring on the Board during the year (January 1 through December 31) may be filled by appointment by the Board. A majority vote of the Board (5) is required for said appointment. An appointment ends on December 31 of the year appointed. An appointed term does not enter in the six (6) year limit set forth in the Articles.

Edited March 28, 2023 at 01:15 AM by Tomm
added information

[Weldon Merritt]

On 3/27/2023 at 7:05 PM, Tomm said:

Question 1: Can they attend the meeting as board members, making the attendance 7, achieving a the quorum even though they have not been sworn in? 

So far as RONR is concerned, "searing in" of officers is purely ceremonial and has no bearing on the validly of their elections or appointment. Whether your bylaws require that the officers be installed before they can assume the office is a matter of bylaws interpretation, which only your own organization can do.

On 3/27/2023 at 7:05 PM, Tomm said:

Question 2: (Hypothetical) If the board experiences a situation where several board members either resigned or passed away leaving the board with less than the required number of members required for a quorum, can the quorum requirements be automatically reduced so that the board can still conduct the business of recruiting or appointing new members?

If the bylaws actually specify that the quorum is six. then no, it cannot be reduced just because the membership has fallen below that number. (One of the perils of having a fixed number as the quorum.) The only exception to this is that in a body that has the authority to set its own quorum, if all members are present (i.e., there are no absentees to protect), they can proceed to set a lower quorum. But I seriously doubt that this wood apply to your board, unless they have the authority to amend the bylaws on thier own.

[Tomm]

On 3/27/2023 at 6:40 PM, Weldon Merritt said:

But I seriously doubt that this wood apply to your board, unless they have the authority to amend the bylaws on their own.

They do have the ability to amend the bylaws on their own but I'm assuming you mean it still needs to done while they meet the quorum requirements stated in the bylaws? 

[Josh Martin]

On 3/27/2023 at 8:05 PM, Tomm said:

The board is comprised of 9 members. 6 members are required to establish a quorum according to the bylaws.

To clarify, do the bylaws require a quorum of 2/3 (which works out to six members if all seats are filled) or do the bylaws specifically require a quorum of six members, period?

On 3/27/2023 at 8:05 PM, Tomm said:

There are currently 2 vacancies leaving only 7 members and 2 members have now come down with Covid and will not be attending this Thursdays meeting leaving the board with only 5 members.

2 people have already been appointed to the board in an Executive Session to fill the vacancies but have not been officially sworn in. 

Do the bylaws or applicable law permit board members to attend electronically? That would seem to be one solution.

On 3/27/2023 at 8:05 PM, Tomm said:

Question 1: Can they attend the meeting as board members, making the attendance 7, achieving a the quorum even though they have not been sworn in? 

So far as RONR is concerned, yes. The "swearing in" is purely ceremonial under RONR and does not affect the time at which the board members took office. Under RONR, the new board members take office at the time they are elected (if they are present and do not decline, or if they are absent but have previously consented to their candidacy) or at the time they are notified and do not decline (if they are absent and have not previously consented to their candidacy). The bylaws may, of course, provide otherwise.

"An election to an office becomes final immediately if the candidate is present and does not decline, or if he is absent but has consented to his candidacy. If he is absent and has not consented to his candidacy, the election becomes final when he is notified of his election, provided that he does not immediately decline. If he does decline, the election is incomplete, and another vote can be taken immediately or at the next meeting without further notice. After an election has become final as stated in this paragraph, it is too late to reconsider (37) the vote on the election.

An officer-elect takes possession of his office immediately upon his election's becoming final, unless the bylaws or other rules specify a later time (see 56:27). If a formal installation ceremony is prescribed, failure to hold it does not affect the time at which the new officers assume office." RONR (12th ed.) 46:46-47

I think there is some question as to whether your bylaws provide otherwise. We are told the bylaws provide as follows:

"SECTION 3: INSTALLATION OF DIRECTORS At the first Board meeting after a Board of Director has been newly-elected or newly-appointed, the President of the Corporation shall formally install the new Board of Director(s) specifying when their term of office commences."

The wording of this sentence is somewhat ambiguous to me. It is not entirely clear to me whether or not this rule provides that the new board members do not take office until the installation occurs. Even to the extent that it does provide this, I would note that it may be that the installation can proceed even in the absence of a quorum. RONR has no answer to this question, so that will also be something for the organization to interpret.

On 3/27/2023 at 8:05 PM, Tomm said:

Question 2: (Hypothetical) If the board experiences a situation where several board members either resigned or passed away leaving the board with less than the required number of members required for a quorum, can the quorum requirements be automatically reduced so that the board can still conduct the business of recruiting or appointing new members?

The quorum requirements are whatever the bylaws provide for. Depending on the manner in which the quorum requirement is written, it may or may not be the case that the quorum requirements will be "automatically reduced" when the number of board members changes. If the bylaws provide for a proportion of board members for the quorum (such as a majority), then that number will automatically adjust when the number of board members changes. On the other hand, if the bylaws provide a fixed number for board members (such as six), then that number will not change, unless there is some other rule in the bylaws in this matter. It may also be that there is a solution to this problem in applicable law.

Finally, as Mr. Merritt notes, there is one other "escape hatch," which is that an assembly which has the power to set its own quorum requirement has the ability to suspend the rules relating to the quorum, provided that every member of the assembly is present.

"Rules protecting absentees cannot be suspended, even by unanimous consent or an actual unanimous vote, because the absentees do not consent to such suspension. For example, the rules requiring the presence of a quorum, restricting business transacted at a special meeting to that mentioned in the call of the meeting, and requiring previous notice of a proposed amendment to the bylaws protect absentees, if there are any, and cannot be suspended when any member is absent.

An elected or appointed body that lacks the authority to determine its own quorum may not suspend the quorum requirement, even if all members are present." RONR (12th ed.) 25:10, 25:10n8, emphasis added

On 3/27/2023 at 10:08 PM, Tomm said:

They do have the ability to amend the bylaws on their own but I'm assuming you mean it still needs to done while they meet the quorum requirements stated in the bylaws? 

Certainly a quorum is required to conduct business, including amending the bylaws.

But if the board has the power to set its own quorum (which it does, if the quorum is set in the bylaws and the board can amend the bylaws), then the board may suspend the quorum requirement if every board member is present, as noted in the citation above.

Edited March 28, 2023 at 11:12 AM by Josh Martin

[Tomm]

On 3/28/2023 at 4:08 AM, Josh Martin said:

To clarify, do the bylaws require a quorum of 2/3 (which works out to six members if all seats are filled) or do the bylaws specifically require a quorum of six members, period?

They specify 6

[Weldon Merritt]

On 3/28/2023 at 5:08 AM, Josh Martin said:

But if the board has the power to set its own quorum (which it does, if the quorum is set in the bylaws and the board can amend the bylaws), then the board may suspend the quorum requirement if every board member is present, as noted in the citation above.

I concur with that,. and should have clarified that I meant they condo suspend teh quorum (if all were present). 

[Richard Brown]

On 3/28/2023 at 6:08 AM, Josh Martin said:

To clarify, do the bylaws require a quorum of 2/3 (which works out to six members if all seats are filled) or do the bylaws specifically require a quorum of six members, period?

 

On 3/28/2023 at 9:01 AM, Tomm said:

They specify 6

Than six it is.

[Josh Martin]

On 3/28/2023 at 9:01 AM, Tomm said:

They specify 6

Thank you. Based on this, the quorum remains at six regardless of the current number of board members.

In the event, however, that the total number of board members falls below six, the rules relating to the quorum requirement may be suspended, provided that every member of the board is present.

In the long run, of course, the board may wish to consider whether it is prudent to amend the bylaws to change the quorum requirement.

[Tomm]

Taking the following ambiguous bylaw into account:

"SECTION 3: INSTALLATION OF DIRECTORS At the first Board meeting after a Board of Director has been newly-elected or newly-appointed, the President of the Corporation shall formally install the new Board of Director(s) specifying when their term of office commences."

And based on 46:47, can the chair swear-in the new directors immediately prior to the start of the meeting so that once the meeting is called to order there would be a quorum present?

[Josh Martin]

On 3/28/2023 at 3:05 PM, Tomm said:

Taking the following ambiguous bylaw into account:

"SECTION 3: INSTALLATION OF DIRECTORS At the first Board meeting after a Board of Director has been newly-elected or newly-appointed, the President of the Corporation shall formally install the new Board of Director(s) specifying when their term of office commences."

And based on 46:47, can the chair swear-in the new directors immediately prior to the start of the meeting so that once the meeting is called to order there would be a quorum present?

So far as RONR 46:47 is concerned, these people are already board members and the swearing in is purely ceremonial. Nothing in RONR would prevent such a swearing in from occurring outside of a meeting, but the bylaws appear to be specific about when it occurs.

As to whether the provision in your bylaws provides that board members do not take office until they are sworn in and, if so, whether such a swearing in can occur in the absence of a quorum, I have no idea.

The key phrase seems to be "specifying when their term of office commences." I can see a reasonable argument that this phrase means that the term of service does not begin until after the swearing in. On the other hand, I can also see a reasonable argument that it simply means that, in the installation ceremony, the President specifies the time at which the term of office commences, and that this does not prevent that time from being in the past. If it were not for this phrase, then I think it would be clear that this section simply specifies the time at which the installation occurs, but does not change when the board members take office.

Assuming the rule does provide that board members do not take office until installed, the question then arises whether an installation ceremony, in the event that such a ceremony constitutes the formal commencement of the term of board members, constitutes "business" that can only be conducted in the absence of a quorum. I don't know. RONR has no answer to this question because, as noted above, this is not how installation ceremonies work in RONR.

The one thing I will say is I do not believe the swearing in can occur "immediately prior to the start of the meeting." The one thing the rule is clear about is when the swearing in occurs - "At the first Board meeting after a Board of Director has been newly-elected or newly-appointed".

So I think there are three possible interpretations here:

1) The rule does not, in fact, change the time at which board members take office. The new board members are already in office, and the board will have a quorum at the time the meeting is called to order. At that time, the President shall proceed to "formally install" the board members as required in the bylaws, but such an installation is purely ceremonial.

2) The rule does provide that new board members do not take office until sworn in, however, such a swearing in does not constitute "business" in the parliamentary sense and may therefore be completed in the absence of a quorum. The board will not have a quorum at the time the meeting is called to order, however, after calling the meeting to order, the President can promptly swear in the new board members, and the board would then have a quorum.

3) The rule does provide that new board members do not take office until sworn in and such a swearing in constitutes "business" in the parliamentary sense, and therefore may not be completed in the absence of a quorum. The board will not have a quorum at the time the meeting is called to order and will continue to not have a quorum. The swearing in will have to wait until a regular or properly called meeting with a quorum present.

If pressed, I suppose I would personally lean toward interpretation #1, as I do not think the rule is sufficiently clear so as to change the time at which board members take office. But it will ultimately be up to the organization to interpret its own bylaws.

As an aside, it is incorrect to refer to a single member of a Board of Directors as a "Board of Director." This improper usage has become quite common for some reason, and has always been a pet peeve of mine. The proper term would be "director" or "member of the Board of Directors."

Edited March 29, 2023 at 03:16 PM by Josh Martin

[Richard Brown]

I agree with Mr. Martin’s analysis and also would personally favor interpretation number one.

[Tomm]

On 3/29/2023 at 7:14 AM, Josh Martin said:

So I think there are three possible interpretations here:

Thanks Josh for such a comprehensive response. Truly appreciated as it checks off several boxes.

"Directors"....term duly noted.

Thanks