Open Board and Annual Member Meetings in 2021 Take Planning

Annual meetings are on the horizon again, but Covid restrictions are still in place. Without implementation of certain measures for open meetings and social distancing compliance, 2020 made it nearly impossible for hundreds of housing cooperatives to operate, both at a board level with open meeting requirements and at the membership meeting level. If you are one of the hundreds of housing cooperative boards that either delayed annual member meetings or board meetings in order to avoid violation of health and gubernatorial mandates, you are now in a position to start planning now for 2021 having the experience of 2020 behind you.

While housing cooperative governance documents vary from cooperative to cooperative, so do state laws that cover corporate operations. While no two cooperatives or states are identical, there are ways to implement member meeting procedures on a temporary basis if your bylaws do not already provide some latitude. By way of example, Michigan permits several options without a member meeting, so long as those options are provided for under the bylaws.

Additionally, nearly every state has some provision governing virtual meetings without the need for specific language in the bylaws and, like Michigan, may require a written virtual meeting policy to be in place in order to use a virtual member meeting option. But what if you do not have the exact language necessary to hold a member vote without a meeting in your documents? First, contact your cooperative’s attorney and then discuss with him or her whether the following options could work for you.

  • Virtual meetings and virtual balloting platforms are a permissible option so long as there is a written policy in place with guidelines for use in order to maintain the meeting and voting integrity. Your meeting policy should, at a minimum, identify (1) how voting will take place; (2) who will be the IT moderator and offer live support to online users; (3) how you will register your members for attendance; (4) what time voting will begin and end; (5) parliamentary procedure; (6) proxies; (7) nominations from the floor; and (8) distribution of information.
  • Absentee ballots may be a permissible option so long as there is an established policy for board, management and membership to follow. Your policy should, at a minimum, identify (1) proxy and ballot timelines; (2) registration; (3) nomination process; (4) timeline of events; (5) what will constitute a quorum for purposes of counting absentee ballots; (6) how are ballots distributed and then how are they collected; (7) who counts the ballots and who selects those persons (alternatively select a neutral third party outside of the organization such as the League of Women Voters or the National Association of Parliamentarians to open and count the ballots); and (8) if ballots are spoiled, what constitutes spoliation.
  • A hybrid of a virtual meeting and absentee balloting with a hybrid policy outlining, again at a minimum, those items identified above.
  • Adjournment of the annual meeting for a period not to exceed statutory timelines for holding annual membership meetings. For example, in Michigan, annual meetings must be held within 90 days of the date in which they are to be held under the bylaws.
  • Polling the membership or obtaining written consents about the annual meeting in advance of the annual meeting in order get the members’ input as to how and when they want their annual meeting held.

Regardless of the measures you adopt for your cooperative, always engage your cooperative’s attorney to issue a proper legal opinion to the board as to the pros and cons of the measures sought. Always have your cooperative’s attorney assist you with preparation of written, that’s right, written resolutions that outline and detail the board’s decision including the basis for that decision. Both are necessary in the event a member challenges your decision in court so as to establish your decision under the business judgment rule. Courts are less likely to overturn any decision by a board or otherwise interfere with a decision that is based on due diligence and implemented in good faith.

Cooperatives located in states with open meeting requirements were left at a particular disadvantage because many members either do not have a computer or smart device, or they were too unfamiliar with technology to try. Unfortunately for these cooperatives, there was no other option but to hold virtual meetings either through telephone conference or Zoom. We advised many of our clients to start test-runs amongst board members to become acclimated to Zoom functions and features. We then suggested that the board expand those test runs into “informational” member meetings solely for the purpose of getting members acclimated to the process.

Zoom is a great platform for open board meetings because it gives the board the ability to mute all participants except board members so business can be conducted as usual and then to unmute those participants who raise their hands to be recognized during appropriate designated times on the agenda. It also gives the board the ability to move to a break-out room for closed sessions where sensitive and confidential information must be discussed, leaving non-board members in the meeting until the board members return from closed session. Because of the nature of an open board meeting, a virtual platform is the only way to hold such meetings while adhering to social distancing and group gathering restrictions during this age of Covid. The best thing is that while some measures may require a bylaw amendment, not all measures will require a bylaw amendment. Again, it will depend entirely on the contents of your documents and your applicable state laws, but, with the help of your cooperative’s attorney, you can make your next open board meeting or annual member meeting successful.

Conditions could very well abate this year, and meetings may then be held in the fashion prescribed under your bylaws. The wise cooperative board, however, will begin planning now and simply hope that it will not be necessary to implement such a plan.

This article was featured in the Spring issue of CHQ. Click here to read the PDF newsletter.

April Knoch is an associate attorney with Pentiuk, Couvreur & Kobiljak, P.C., in Wyandotte, Mich.

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