Meetings and Quorum of Board of Directors when they have vacancies

[Guest Jimm]

 

 

Hello everyone.   

I was wondering your opinion regarding the Board of Directors calling a meeting to transact business.  Normally, we have a 5 member Board of Directors, all of whom were elected at a recent annual membership meeting.  Since then, two have resigned because they are no longer members of the society.  There are two vacancies.  It's been months and nobody has volunteered to fill a vacancy (although, a good handful are vocal opponents to some of the current Board actions); thus, the Board has not appointed anyone since nobody has volunteered.   The Board has given timely noticed for a meeting in a few days that may take what they believe to be reasonable action on what they believe to be a pressing matter that many in the organization won't find favorable.   Their decision will be financially binding on the membeship (with some indicating legal action).  The questions are, given the By-Laws below:

1.  Can they meet to take action with only 3 Board membs given the By-Laws below state the Board "shall be managed by a Board of 5 members"?

2.  Do they actually have a quorum with only 3 remaining attending?

3.  What if it's only two that attend, the other being absent?

4.  What if another member of the Board resigns, bringing it down to 2 remaining Board members?   (Do they have a quorum then with only 2 and what if they are a split vote themselves?)

5.  Do the requirements of the Vacancies paragraph demand that the remaining Board must fill the vacancy, and if so, must it be before any other business occurs (excepting, maybe, emergency actions)?

By-Laws:

Board of Directors.  The affairs of the Association shall be managed by a board of five (5) directors, each of whom shall be a person entitled to cast a vote in the Association.

Vacancies.  Except as to vacancies provided by removal of directors by members, vacancies in the Board of Directors occuring between annual meetings of members shall be filled by a simple majority vote of the remaining directors.

Quorum.  A quorum at Director's meetings shall consist of a majority of the entire Board of Directors.  The acts approved by a majority of those present at a meeting at which a quorum is present shall constitute the act of the Board of Directors, except where approval by a greater number of directors is required elsewhere in the By-Laws.

Term of Office.  The term of office for each director shall be for a period of two(2) yeaers from the date duly elected, and thereafter until his or her successor is duly elected, unless he or she is removed from office in a manner elsewher provided.

 

   What may be the "legal" and/or "moral" courses of action for the Board?

Thanks for your opinions!

Jimm

 

[Dan Honemann]

At the next meeting of your board, the vacancies should be filled pursuant to this provision of your bylaws:

"Except as to vacancies provided by removal of directors by members, vacancies in the Board of Directors occuring between annual meetings of members shall be filled by a simple majority vote of the remaining directors."

I get the feeling that your board has not tried hard enough to fill these vacancies.

[Richard Brown]

I agree with the response above by Mr. Honemann. It appears to me that the board has not tried very hard to fill the vacancies and that it should take action to do so forthwith. 

Responding specifically to your other questions  based on the rules in RONR, and assuming that they are controlling:

On 6/8/2024 at 2:07 PM, Guest Jimm said:

1.  Can they meet to take action with only 3 Board members given the By-Laws below state the Board "shall be managed by a Board of 5 members"?

Yes. 

On 6/8/2024 at 2:07 PM, Guest Jimm said:

2.  Do they actually have a quorum with only 3 remaining attending?

Yes. See RONR (12th Ed.) 44:9 (b).

On 6/8/2024 at 2:07 PM, Guest Jimm said:

3.  What if it's only two that attend, the other being absent?

Yes. 

On 6/8/2024 at 2:07 PM, Guest Jimm said:

4.  What if another member of the Board resigns, bringing it down to 2 remaining Board members?   (Do they have a quorum then with only 2 and what if they are a split vote themselves?)

Yes, if another board member resigns, leaving only two members on the board, if both are present, they will constitute a quorum and may conduct business. If the votes are split on a motion with one member voting yes and the other member voting no, the motion fails because it did not receive a majority vote. Both members will have to vote Yes in order for a motion to pass.

 

On 6/8/2024 at 2:07 PM, Guest Jimm said:

5.  Do the requirements of the Vacancies paragraph demand that the remaining Board must fill the vacancy, and if so, must it be before any other business occurs (excepting, maybe, emergency actions)?

As Mr. Honemann stated, the board should proceed to fill the vacancies forthwith as provided in the bylaws. However, there is no absolute requirement that the vacancies be filled before any other business can be conducted.

Note: my answers above are based on the rules in the 12th edition of RONR and assumes that those rules are controlling. It is ultimately up to the members of your organization to interpret its bylaws.

Edited June 8, 2024 at 09:55 PM by Richard Brown
Added RONR citation to my answer to question # 2

[Josh Martin]

On 6/8/2024 at 2:07 PM, Guest Jimm said:

1.  Can they meet to take action with only 3 Board membs given the By-Laws below state the Board "shall be managed by a Board of 5 members"?

Yes. Boards have vacancies all the time, and the board doesn't grind to a halt as a result of the vacancies.

On 6/8/2024 at 2:07 PM, Guest Jimm said:

2.  Do they actually have a quorum with only 3 remaining attending?

Yes, there is certainly no doubt that a quorum is present if all three remaining board members attend.

On 6/8/2024 at 2:07 PM, Guest Jimm said:

3.  What if it's only two that attend, the other being absent?

This is perhaps a somewhat more difficult question, as there may be some ambiguity in the meaning of the phrase "a majority of the entire Board of Directors." I would personally interpret it as referring to a majority of the current number of board members, not the total possible number of board members. But I could see a reasonable argument that the language is intended to refer to the total possible number of board members.

So I would personally still say "yes," but it's not as clear-cut as the previous question.

I would say that the board certainly has a quorum at least for purposes of filling vacancies, as the bylaws specifically provide that "Except as to vacancies provided by removal of directors by members, vacancies in the Board of Directors occurring between annual meetings of members shall be filled by a simple majority vote of the remaining directors."

On 6/8/2024 at 2:07 PM, Guest Jimm said:

4.  What if another member of the Board resigns, bringing it down to 2 remaining Board members?   (Do they have a quorum then with only 2 and what if they are a split vote themselves?)

If another board member resigns and that resignation is accepted, then if the quorum is based on the current number of board members, a quorum would be present if both of the remaining board members are present.

If the quorum is based on the total possible number of board members, the board could not obtain a quorum if only two members remained. However, I would say that the board certainly has a quorum at least for purposes of filling vacancies, as the bylaws specifically provide that "Except as to vacancies provided by removal of directors by members, vacancies in the Board of Directors occurring between annual meetings of members shall be filled by a simple majority vote of the remaining directors."

On 6/8/2024 at 2:07 PM, Guest Jimm said:

5.  Do the requirements of the Vacancies paragraph demand that the remaining Board must fill the vacancy, and if so, must it be before any other business occurs (excepting, maybe, emergency actions)?

It demands that the remaining board members must fill the vacancy, yes. It does not require that this must be done before any other business occurs.

Of course, however, the vacancy should be filled in a timely manner.

On 6/8/2024 at 2:07 PM, Guest Jimm said:

 What may be the "legal" and/or "moral" courses of action for the Board?

I can't speak to "legal," as that is a question for an attorney, but my own view is that the proper course of action is to fill the two vacancies as soon as possible, however, the board can (and indeed, must) continue to fulfill its duties in the interim.

[Gary Novosielski]

On 6/9/2024 at 4:09 PM, Josh Martin said:

It demands that the remaining board members must fill the vacancy, yes. It does not require that this must be done before any other business occurs.

However, if the board would lack a quorum but for the "remaining directors" language, then the vacancies would have to be filled first so that a proper quorum could be achieved.

As @Josh Martin points out, much of this depends on the interpretation of relevant bylaws provisions.

Edited to add:

Parenthetically, when I see some business exempted from a quorum requirement by "remaining directors" language, I tend to assume that a reference to the "entire Board" or "full Board" is intended to mean the full number of board positions, including vacancies.

Otherwise if quorum requirements, as is normally the case, refer only to living breathing members, the "remaining directors" language would be unnecessary,  testing the assumption that it was put there for a reason. 

Edited June 10, 2024 at 12:07 AM by Gary Novosielski