Navigating the complexities of charity board voting procedures
Charity and nonprofit board members are called on to perform many responsibilities for the organisations they steward: strategic planning, fundraising and advocacy are just a few. But at the heart of a director’s myriad responsibilities is voting. Each director is in the role to have a voice, and every nonprofit should prioritise effective voting procedures to ensure those voices are heard.
Most boards follow some form of parliamentary procedures. These procedures guide how individuals participate in the process and how voting is handled and go a long way to ensuring voting processes are fair and legal and, for outcomes, binding. But they’re not the only factor. And the risk to organisations that don’t follow sound voting practices is high.
It’s time to take a look at how your board handles voting and whether there are opportunities to improve your procedures.
Voting methods for charity board members
Charity board members must consider two important issues regarding voting:
- Does the law allow it?
- Do the organisation’s bylaws allow it?
Boards may hold their voting procedures by any of the following processes:
- Board management system
- Written ballot
- Voice roll call
- Videoconference
- Teleconference
- Written consent
Before boards decide which method they want to use for a nonprofit vote, they must make sure that method is legal in their country or region and that their bylaws will support it.
Many of these issues were ironed out as boards navigated COVID-19 pandemic shutdowns, but even as more nonprofits shift to digital processes, many still seek guidance around written consent. Originally, written consent referred to mailing out a resolution to board members, having them cast their vote in writing, verifying it with their signature and mailing it back to the board secretary. This type of vote is perfectly legal and works well for issues of unanimous consent.
However, some boards have used email as a means of voting by written consent. Beware: Email votes are considered electronic proxy votes and aren’t legal in many states. It’s important for nonprofit boards not to cut corners out of convenience in ways that lead to illegal procedures that could nullify votes. Our blog post, “The risks of boards voting by email,” describes issues that boards may face when allowing email voting for a nonprofit vote.
Fortunately, secure board management systems offer a mechanism for flexible and legal board voting. As long as laws and bylaws concur, a board management system is the safest way for boards to vote digitally. Granular user permissions also assure boards that the board president is sending resolutions to board members who are who they say they are, and the level of security on a board management system such as BoardEffect helps to reassure boards that their votes are confidential and safe from cyber threats.
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The role of bylaws around voting procedures
Second only to laws, a charity or nonprofit’s bylaws provide the guidelines for voting eligibility. While laws have some limitations on nonprofit voting procedures, for the most part, governments are more concerned with making sure that charities operate exclusively for charitable purposes rather than what rules they use to govern themselves with.
Unlike for-profit entities, no one actually owns a charity or a nonprofit organisation, and these organisations fall into many different classifications. Bylaws provide clarification about whether an organisation is board-driven or member-driven:
- In a member-driven charity or nonprofit, the organisation wants to give members democratic control over the organisation. With this structure, members have the power to elect and remove board members. Member-driven nonprofits are common among organisations that exist to serve their members. Some examples of member-driven organisations are trade unions, churches, chambers of commerce, credit unions and social clubs. The bylaws of member-driven nonprofits clarify membership criteria, privileges and other rights and obligations that pertain to voting eligibility.
- In a board-driven charity or nonprofit, the board is the ultimate seat of authority. Only the board has the power and authority to elect and remove board members.
Additionally, bylaws should outline the terms of office for board members and officers. Regular board refreshment for board-driven nonprofits is considered best practices. Boards that retain the same board directors, year after year, may become limited in their thinking and, as a result, become nonresponsive to the needs of their stakeholders.
Boards may establish successive or staggered terms. Ex-officio board directors are not always subject to board director term limitations. The bylaws address the specific rules for how board directors may be added, removed or replaced.
Trustees assume fiduciary responsibilities, which means that they must place the interest of the organisation ahead of their own and they must make decisions for the organisation as any ordinary, prudent person would. Fiduciary responsibilities are a legal mandate and board members may be held personally liable for not upholding them.
For this reason, trustees must hold regular elections and avoid the temptation to repeatedly reappoint the same board members. Failure to meet these obligations may result in state intervention and invalid votes.
Bylaws are not set in stone, and if your organisation’s bylaws are limiting the board’s ability to work effectively, including conducting votes, you can explore making amendments.
As Ellis Carter points out on the CharityLawyer blog bylaws should “include key information such as the number of directors who must participate to hold a valid meeting (i.e. a quorum), the number of votes required to be an act of the corporation and should restate many of the statutory requirements such as notice requirements for ease of reference.”
“[Your bylaws] should include key information such as the number of directors who must participate to hold a valid meeting (i.e. a quorum), the number of votes required to be an act of the corporation and should restate many of the statutory requirements such as notice requirements for ease of reference” – Ellis Carter, nonprofit lawyer
Meeting voting procedures
The most common type of voting is an oral vote at an in-person or hybrid meeting.
A general consent vote is considered a silent aye. Board members who don’t vote on an issue are counted as yes votes.
Written voting procedures are used less often than oral and ballot votes. Examples of appropriate uses of written votes are when board members are voting on a noncontroversial topic and when board members are ratifying a decision that they have already made. A valid reason for taking written votes is when the matter at issue requires a timely decision.
When using board management software for voting, the board administrator can send resolutions out to board members to vote on digitally, and the results will be stored then on the solution.
Nonprofit board members must take their voting privileges seriously to avoid personal liability and liabilities for the organisation. It’s vital that they understand all the laws and bylaws and fulfill their board duties accordingly. Using a board management solution helps ensure these actions are completed in a compliant way.
The role of the board management system in charity voting procedures
Board management systems offer a flexible, convenient and useful mechanism for all variations of board voting. Consider what BoardEffect offers:
- Dynamic meeting book building that allows agenda items to be added easily with links to supporting documents. Board members can access the meeting materials from their own devices, ensuring they are able to prepare for efficient discussion and move more quickly to voting.
- A searchable document library that ensures board members can find relevant materials, both current and historical.
- A survey and polling feature that enables digital voting. It can also be used for measuring board member engagement, collecting updated skill sets and identifying areas for improvement.
Following effective, fair and legal voting procedures is a critical responsibility of the nonprofit board of directors. BoardEffect makes it easy for charity and nonprofit boards to access all the tools they need for responsible service. Let us know how we can support your board today.
