Posted April 10th, 2020 in Top Stories, Legal Insights with Tags Nonprofits, COVID-19, COVID-19 for Nonprofits
How Can Nonprofits Hold Board and Member Meetings During a Pandemic?
Most nonprofit board/member meetings are governed by the below set of rules, though there are a few nonprofits subject to the Open Meeting Law. This article does not address OML issues.
Here is the law for most nonprofits:
- Under Minnesota law (and the law of many other states), the board may conduct its meetings via remote communication regardless of what the articles and bylaws say. “Remote” communication here is defined as the means by which all the persons in the meeting can interact and communicate with each other in real-time, including teleconference, videoconference, web-based interactive conferencing.
- Member* meetings are treated differently from board meetings. Voting member meetings may only be held remotely if allowed by the articles and bylaws.
- *Let’s be clear on members. Lots of nonprofits have people called “members” who don’t have the right to vote on the affairs of the corporation. For example, a member of a public radio station may be a member, but likely does not have voting rights as a member. Trade associations have voting members.
- The law also requires an annual meeting of voting members to be held at the time and place stated in the articles or bylaws. If a place is not stated, the meeting must be held in the county where the corporation’s registered office is located.
- Unless prohibited by the articles or bylaws, any action that may be taken at a meeting of voting members may be taken without a meeting if the nonprofit mails or otherwise delivers a ballot to every member entitled to vote on the matter.
When can a meeting be conducted remotely?
May conduct board meetings via remote communication regardless of what articles and bylaws say.
Voting member meetings may only be held remotely if allowed by the articles and bylaws.
Is there a specific "place" requirement for a meeting?
An annual meeting of voting members must be held at the time and place stated in the articles or bylaws. If a place is not stated, the meeting must be held in the county of the registered office.
Can action in writing work?
The board may take action by having board members sign to approve a written resolution, which generally may be delivered via email.
Unless prohibited by the articles or bylaws, any action that may be taken at a member meeting may be taken via a written ballot, which generally may be delivered via email. The rules regarding how this type of ballot is done are very detailed.
Guidance for the Coronavirus Pandemic
You are good to go on remote board meetings. If your articles or bylaws specifically prohibit remote board meetings (I have never seen this), have board members waive any requirement in articles and bylaws that meetings be held in person, and then meet remotely. Boards can also take action by signing a written resolution. A written action is a written resolution, which can usually be emailed to directors (assuming directors have consented to use email in this way). Directors can return the signed resolution to the nonprofit via email. Unless the articles and bylaws allow otherwise, boards must have unanimous approval in writing for an action.
Voting Member Meeting
Members are generally supposed to have an annual meeting. And under certain circumstances, members can demand a special member meeting. If the articles and bylaws are silent or require in-person member meetings, what can be done when it is not safe to gather together? The overriding principle should be that members must be treated fairly. Here are my recommendations:
- Perhaps postponing a member meeting to allow the members to meet in the usual in-person format when it is safe to gather is most fair.
- If the member meeting cannot be postponed, and gathering is not safe, look to past treatment of member meetings. How would the members expect the nonprofit to act? (If members demand a meeting, the nonprofit will typically have 30 days to send notice of the meeting and another 90 in which to hold the meeting.)
- If a nonprofit’s members met remotely (teleconference or videoconference) in the past, despite the lack of ability to do so in the governing documents, then do that. Explain the situation openly in the meeting notice and communications to members. Ask members to waive the in-person requirement at the meeting.
- If a nonprofit’s members have not met remotely in the past, and governing documents do not allow remote member meetings, reach out to the members via the normal channel of communication to solicit feedback on how to proceed. It may be most fair to hold a member meeting remotely during a pandemic, even if it is not allowed in the governing documents. Remote meetings have become so common that it is hard to imagine a court invalidating actions taken at a remote member meeting when the meeting is noticed fairly and held remotely for the safety of the members.
Voting Member Ballot
When a nonprofit needs its members to approve a specific action (amendments to governing documents, or a merger, for example), but a meeting is not required, an option is to have a member vote via written ballot. A nonprofit may hold a member vote by written ballot unless explicitly prohibited by the articles or bylaws (I have never seen this). State law generally allows written ballots to be sent to members electronically. Requirements regarding what the ballots must say are detailed. It is generally a good idea to consult legal counsel when drafting a member written ballot.