Frequently Asked Questions on Electronic Board meetings

Some of our Board members say we should switch over to meetings by e-mail. They told me that the future is here. E-mail meetings would be more efficient and give the directors more time pay attention to other matters. I told the Board that I was not positive that the Board could hold valid meetings by e-mail, but that I would look into it.

If your Board is beginning to inquire about e-mail meetings, this article should help by giving you relevant questions and answers.

Q. Are Board meetings by e-mail legally valid?

A. No. The essential reason is that by law governance of the nonprofit corporation is entrusted to a board of directors, not individual directors. This means the board is only authorized to deliberate and act as a group. Virtually every state has incorporated this concept by mandating that a valid meeting requires a quorum which is made up of a specified number of directors present at a meeting.

Q. Is there any place for electronic communications in modern Board meetings?

A. Yes. A few states have realized that some electronic communications approximate the basic concepts of presence and opportunity for meaningful communication and deliberation. These states have enacted very stringent laws and you must consult and conform to you own state's statute if you hope to accomplish a valid board meeting using electronic means as opposed to one in which the physical presence of a quorum is required.

Q. What is an example of a state that has enacted one of these statutes?

California’s statute requires that each Board member be able to participate simultaneously with each other Board member. In addition, the Board is required to adopt a “means of verifying” both that each participant is a director and that all votes are cast by a director.

The first requirement is designed to ensure that Board meetings by electronic means approximate in-person meetings or conference call meetings in which each director can “hear” each other director and enjoy the ability to fully participate in the meeting.

Note: This “concurrent communication” requirement clearly precludes a valid meeting by email because e-mail does not permit one director to communicate simultaneously with each other director.

What is permissible is the chat room which allows instantaneous and simultaneous communication between Board members. The chat room model comes close to the physical presence or conference call models by enabling exchange of views, debate and deliberation.

Q. In California, the Board can hold a valid meeting by electronic means using the chat room model. But how does the Board know who is participating in the meeting?

A. California requires that the association adopt “some means of verifying” both that (1) each participant is a director and (2) all votes or actions are cast or taken by a director. In other words, if the association fails to adopt an appropriate means of verifying the director’s identity and the authenticity of each vote, then there is no valid meeting even if the model has been scrupulously followed. The rationale here is that the directors cannot see or hear each other but are confined to a video screen which displays only a configuration of digital symbols. The statute addresses this issue by mandating that an association in good faith adopt a viable verification system.

Caveat: Remember we are using the California statute only as an example. You will have to check your own state’s electronic meeting statute, if there is one.

Q. Assume your association is based in California or a state with a similar statute. Should you begin electronic meetings as soon as possible?

A. You will have to phase in electronic meetings. Before you can start, at a minimum you will need the proper chat room model equivalent. You must also ensure adequate training of each of your Board members in using the chat room.

Q. My association is in a state that does not permit electronic meetings. What is my best approach?

A. You are probably well advised to assume that your state will eventually adopt an electronic meeting law- and that the law in your state will not be too far different from the California law, at least in the basic concepts of simultaneous communication between Board members and verification of the identity of directors.

Under this scenario the most important issue to all association executives who desire to make electronic meetings a reality will be to properly orient each Board member to the use of the equipment and technology so that the director feels proficient and comfortable participating in an electronic meeting.

Q. What if one of my Board members objects to electronic meetings?

A. The California statute does not deal with this issue directly but implies that an electronic meeting can be mandated by the majority vote of the Board. Obviously, this is a very serious issue, both legally and practically. A director who refused to participate despite the Board’s action to implement the electronic meeting system would be disenfranchised. It is hard to imagine that a court would permit this to happen to a duly elected Board member.

Note: Therefore, we repeat that the first order of business is to cause each Board member to become proficient and comfortable with electronic meetings.

Q. Assume you get each director up to speed and you begin holding electronic meetings. Can you revert to holding traditional meetings?

A. Absolutely. You have complete discretion as to the form of the meeting (physical presence, conference call or electronic) as well as having control over the issues to be addressed at each meeting. For example, you may want to start using electronic meetings for less important issues that you expect will require little discussion or debate. You can then work in other more substantive issues as you see fit. You may want to withhold some sensitive issues such as personnel, litigation etc. from electronic meetings.

Caveat: Regardless of the form of the meeting, you are still required to observe all of the prerequisites of a traditional meeting. Only specified persons may call a meeting. Every person entitled must receive notice of the meeting. The purpose of the meeting should be stated together with an agenda, when appropriate. The meeting should be presided over by a specified person who should require that the meeting be conducted in an orderly fashion according to an agreed upon parliamentary authority. Action should be taken by a prescribed vote on a particular issue. The Board’s action should be reduced to minutes, which, when approved become the official minutes and are filed with the Board’s records.

Postscript: There are limitations to conducting meetings via electronic communications. E-mail does not permit the give and take of the traditional Board meeting because it does not permit simultaneous communication by each participant. The chat room mode includes simultaneous communication but still does not permit the same quality of give and take characteristic of the face-to-face meeting. At the same time, the electronic meeting is either available to your association now or it will become available soon.

Just because the electronic meeting is or will be available for your use does not mean that you are required to implement it for you association in a way that does not fit your needs. Rather, you should take a measured approach, which carefully evaluates the best use of the electronic meeting for you association as well as the best way to implement it.