Board Quorum
May 23, 2016In order for a common interest development to make a membership decision or board decision, “quorum” must first be attained. Quorum is a Latin word meaning “of whom”, but basically means that there is a sufficient number of participants in order to be able to fairly (and legally) call a decision of the body. Without quorum, the body is not acting, so a decision made in a meeting without quorum is not a decision at all.
Board Quorum
Boards must have a certain minimum number of directors present in order to make a corporate decision. Usually this is determined by the governing documents (normally, bylaws). However in the absence of any explicit statement in the bylaws, Corporations Code Section 7211(a)(7) states that “a majority of the number of directors authorized in the articles or bylaws constitutes a quorum of the board for the transaction of business. Mostly commonly, the quorum of the board is simply a majority of the directors.
The existence of quorum is critical to establish that a vote taken in the meeting was actually a decision of the association. This is why the minutes should reflect which directors attended, so that quorum is documented. Without quorum, the board is not legally acting, so the corporation is not acting.Directors, while elected by their neighbors to serve the community, are still volunteers, and association presidents can find themselves frustrated by the inability to attain quorum. One frequently used strategy is to have a director who cannot attend meetings give their “proxy” to another director, in the erroneous belief that this establishes quorum. However, the law does not recognize a “board proxy,” and all decisions made at a meeting which in fact does not have quorum could be subject to challenge as non-corporate actions.
Tips on quorum
- A director may (unless the association governing documents ban it) participate in board meetings by speakerphone. Corporations Code 7211(a)(6) and Civil 4090(b) allow directors to participate by phone, so long as those attending can hear the director and the director can hear all in attendance.
- Some directors cannot regularly attend meetings, but avoid resigning because they are not “quitters” and do not want to give up on their service commitment. Let them off the hook by suggesting they resign until their circumstances allow them to serve.
- Some board meetings are unnecessarily terminated because a director leaves before the agenda is completed and quorum is destroyed. Corporations Code 7211(a)(8) allows meetings to continue so long as a sufficient number of directors are present to constitute a majority of a quorum. In other words, if a five member board starts a meeting with three directors, and one director leaves, the two remaining present directors can still conduct association business. Two is the majority of the minimum quorum of a five member board, so those two can continue to make and pass motions, but they must act unanimously.
- Consider amending association bylaws to provide that directors missing three consecutive regularly scheduled meetings may be deemed to have resigned. This takes pressure off both board and director, as asking a director to step down can be uncomfortable.
- Try to shorten meetings. Long meetings discourage volunteers, and can make board service impractical.
Written by Kelly G. Richardson
Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.
