HARMON CURRAN NONPROFIT LAW BLOG

As nonprofit boards navigate the COVID-19 crisis, it’s vital to understand how your organization’s board can continue to make important decisions without meeting in person. The laws in most states allow board meetings to be conducted remotely by telephone or video call. In addition, a board of directors is usually permitted to take action without a meeting through a process in which each director consents to the action by delivering written notice to the corporation’s secretary or other officer.  However, the board must follow applicable procedural steps for these actions to be valid.

Conducting a Board Meeting Remotely

Whether it is permissible for your organization’s board to conduct a meeting over the phone or via video calls depends on the law in your state as well as your organization’s governing documents (typically, the articles of incorporation and bylaws). It is necessary to check both sources to confirm that remote meetings are permitted and to understand how they must be conducted for actions taken to be binding. If permitted, board action may be taken remotely using whatever process for notice, quorum, holding the meeting, and taking action that the law allows and your governing documents outline.

Best Practices for Remote Board Meetings

Below are some best practices for conducting remote board meetings:

• Follow the procedures outlined in your state’s law and your governing documents (such as your bylaws) regarding meeting remotely to ensure the actions are binding on the organization.
• Use a technology that works for all members of your board.
• Set an agenda and send necessary materials in advance of the meeting.
• Create remote meeting rules of conduct to promote transparency and fairness during any voting and/or Q&A periods. The rules of conduct should be available before the meeting begins.
• Ensure all board members have an opportunity to participate in the meeting.
• Create a consistent format and process for conducting votes during the remote meeting.
• Record the discussions and actions taken at the meeting in the form of minutes in the same way you would for an in-person meeting and maintain the minutes with your permanent corporate records.

Board Action Without a Meeting

Whether it is permissible for a board to act without a meeting also depends on the law in your state and your organization’s governing documents. In most states, action without a meeting is permissible only if the directors provide unanimous written consent – meaning every director must approve of the action in a signed writing, and no director may abstain or fail to deliver their consent. In many cases, a written consent may be given electronically such as through electronic signature software or an email sent from a director’s email address on file with the corporation.  Note the description of the board action must appear in each written consent and should be identical for each director in order to avoid any dispute regarding what action was taken.

Best Practices for Obtaining Written Consent

Below are some best practices for obtaining written consent:

• Follow the procedures outlined in your state’s law and your governing documents (such as your bylaws) regarding board action without a meeting to ensure the actions to be taken will be valid.
• Ensure you have a current and complete list of all board members.
• A proposed resolution should be clearly drafted with all relevant details and sent by an authorized officer or member of the board to all board members.
• Instruct board members exactly how to send their vote. If using email, make sure the email instructs board members to hit “reply” rather than create a new email.
• Request that all votes be consistent such as, “Yes” or “No” or “Approve” or “Reject.”
• Retain the written or electronic consent with the organization’s board minutes.

Conclusion

While in-person board meetings can help establish and cement relationships and enhance productivity, remote board meetings will likely be the norm until a post-pandemic return to business as usual. Written consents are a great way for nonprofits to take quick action and accomplish more routine business without the scheduling hassle that comes with meetings. Stay on top of these best practices to make sure your board is prepared to take action remotely.