When should your non-profit board NOT vote by email?
In a recent conversation with a friend about their non-profit board, it came to light that board members used email to take an important vote because scheduling a special board meeting was too difficult with everyone’s busy schedules.
After hanging up the phone, I couldn’t get this conversation out of my head because the issue this board had voted on was really contentious and there had not been very much consensus coming out of the previous board meeting. The question that kept zipping around my head was:
“When is it not appropriate for a non-profit board to use email to vote?“
So, I went to Google and started clicking around. The answers I found might surprise you!
The first article I found in The Nonprofit Quarterly was titled “E-mail voting: A Simple Trap for Nonprofit Boards” immediately raised red flags for me, especially when I read:
“The busy schedules of nonprofit board members make face-to-face meetings seem like a luxury. Consequently, a new trend has surfaced that may run afoul of the law—the vote by e-mail option.”
The words “RUN AFOUL OF THE LAW” jumped off the page.
As I continued reading, I learned another interesting fact. Many states prohibit non-profit boards from voting by proxy and email is seen by courts as being akin to a proxy vote. The Nonprofit Quarterly does a nice job of explaining why:
“The theory behind this prohibition is that the discussion and interchange of ideas that occur at board meetings are essential to the informed exercise of the directors’ fiduciary duty to the corporation.”
In other words, the government doesn’t want to enable busy people to take an easy way of meeting in-person to discuss important issues and perform their governance and oversight responsibilities. Huh? That makes sense to me!
Since I am a resident of the great (and bankrupt) State of Illinois, I started clicking around Google to see if my friend’s board had just broke the law. I quickly found that they had not because the state recent changed the law. Here is an excerpt from a publication on Venable LLC explaining the change:
The new law, which becomes effective on January 1, 2010, amends the General Not For Profit Corporation Act. Regarding the use of electronic means of communication, the bill:
* States explicitly that notices to members and directors may be delivered by electronic means to an email address, fax number, or other appropriate contact listed in the records of the corporation or approved by the organization’s articles of incorporation or bylaws.
* Allows members to act without a meeting by voting through mail, email, or other electronic means, where the old Act only permitted members to act without a meeting through the written consent of all members entitled to vote.
* Removes certain notice requirements associated with actions taken by the members through unanimous written consent.
* Provides that any action required to be “in writing”—by either the members or the board of directors—may be taken by electronic means, unless actions by electronic means are explicitly prohibited by a corporation’s articles of incorporation or bylaws.
So, do I have you concerned yet? If you’re outside of Illinois, do you find yourself wondering if your agency has been breaking the law? Are you starting to wonder — like I did — when is it and when is it not appropriate to use email to record a board vote?
If you are asking these questions, then GOOD . . . my job here is almost done. 😉
The following are just a few suggestions you may want to consider:
- Do some research on Google (or ask an attorney) if email voting is legal in your state.
- If it is legal and you want to add this governance tool to your toolbox, add language to your bylaws specifically authorizing email voting.
- Engage the entire board in a governance discussion about when email voting is appropriate and when it is not appropriate . . . build consensus and codify these decisions in your bylaws.
- Use email voting sparingly . . . don’t get in the habit of using it.
- Discourage the board from using an email vote for issues that aren’t routine and lack consensus (in other words, issues that need to be discussed and where consensus needs to be built).
Has your board ever taken an email vote where it felt wrong to do so? Please use the comment box below to share when this has happened. Why? Because we can all learn from each other.
Here’s to your health!
Founder & President, The Healthy Non-Profit LLC