Is it illegal to conduct board votes via email?

Is it illegal to conduct board votes via email?

It’s a logical assumption. Unfortunately, it’s also a dangerous one. For now, for California-based nonprofit corporations, conducting board votes via text is illegal. In fact, it may surprise you to learn that it is barely legal to conduct board votes via email.

How are votes counted on board of director?

Traditionally, boards have counted votes in various ways. Online voting is more accurate, efficient, secure and transparent than older, traditional methods. For these reasons, boards are turning to online voting as the most preferred means of voting.

Can a board decision be made by email?

A board decision made by email is legally recognizable only if it is unanimous among all installed directors (except when a director must recuse him/herself due to conflict of interest or loyalty). If your nonprofit wishes to conduct a board vote electronically, the following steps are recommended:

What to do if a board member expresses concern about a motion?

Ask the board secretary to print all email votes received and include them with your minutes for ratification in your board minutes. If a board member expresses concerns or requests additional discussion about the presented motion, defer the vote until a meeting can be held in-person (or via telephone/video conference).

Why are e-mail votes not allowed at board meetings?

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. An e-mail vote—that is, a proposal circulated and responded to by e-mail— is essentially a proxy vote delivered electronically.

Can a HOA board of directors use email?

Here, an expert explains California’s new anti–email law and provides three examples of never–handle–this–by–email issues. States may have different rules governing the use of email by an HOA board of directors, so be sure you check with your HOA attorney on state–specific regulations you’ll have to follow.

What are the rules for an email board?

Most require participants to “hear each other” or “communicate concurrently” – and neither test is met by email exchanges. What is the thinking behind these rules? In order to meet their Duty of Care, board members need to properly deliberate matters before them.

Can a board member move a motion by email?

Discussion can precede or follow a motion. A director can move a motion, and should include a suggestion for discussion time. The Secretary (or relevant board member) will post the motion on the board’s online space. All discussion must follow the same email thread; other emails should not follow this thread.