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Introduction to
Part lll: Counting Proxy Votes for Quorums
This is the third article on quorum
requirements, proxy voting and other voting methods. The subjects
are complex. The methods adopted by any organization have a serious
effect on the way the organization is able to do business. We hope
the series of articles presents more useful information for evaluating
the proposals for changes in Sun City Texas Community Organization By
Laws.
Foreword on Quorums and Proxy Voting Written by Steve Fought
The purpose of these papers is to help us all make informed
choices as we move ahead in the Sun City Governance transition
process. In each case we hope to provide a short background
addressing why an issue might be important, what the logic might be that
underpins the various views, and how other organizations such as ours
have approached similar matters. For instance, in the first piece
(on Quorums), we describe why and how Quorums are used and the manner in
which organizations such as ours have set them. We attempt to be
accurate, concise, and readable without sacrificing thoroughness.
Comments are encouraged and welcome.
Counting Proxy Votes Toward Meeting Quorum Requirements
Some organizations count only those
physically present at the time/place of the voting process toward the
Quorum Requirement. Some organizations, for a variety of reasons,
one of which is the level of interest/attendance at these meetings by the
voting members, allow votes cast as Absentee, Early Voting, or Proxy
ballots to be counted toward the Quorum Requirement. In these
latter cases it is at least numerically possible for the Quorum
Requirement to be met with no members physically present at the
time/place of voting.
Of the three methods of casting ballots without having to be physically
present at the polls at a specific date/time, Absentee and Early voting
seem to present the least number of issues. This is
because the mechanisms for monitoring and validating Absentee and
Early Voting are essentially the same as those for monitoring and
validating Votes cast in person. Proxy Voting, however, presents new
issues, largely because it is the only one of the three approaches where
the individual voter transfers authority to cast a vote and the only one
of the approaches which allows another individual (or individuals) to
accumulate and cast multiple votes.
The possibility of an individual, or individuals, having control of a
large number of votes, all of which count toward meeting the Quorum
Requirement, raises the specter of a small number in individuals being
able to call a meeting, meet the Quorum Requirements, and then conduct
the business of the organization according to their own wants and desires
-- potentially counter to the interests of a majority of the members or
even harmful to the survival of the organization. The likelihood of
such a dire set of circumstances cannot be quantified, but it should be
clear that the opportunity for this sort of dysfunctional behavior to
occur increases as the Quorum Requirement decreases.
Thus we have a spectrum of possible outcomes as we consider the Quorum
requirements and how "attendance" will be tabulated, with the
focus of our concern being how we count members who vote through
Absentee, Early or Proxy methods. Of these three methods, Proxy
Voting presents the greatest concern, for all the reasons
cited.
At one end of our spectrum we have high Quorum Requirements and very
restrictive rules for Absentee, Early or Proxy Voting. While the
conduct of business, and voting is well defined, it may be so restricted
that the organization cannot conduct business in an efficient manner --
largely because Quorum Requirements cannot be met on a regular basis or,
even when they are met, higher levels of affirmative votes, for the more
difficult/contentious issues, may not be possible.
At the other end of the spectrum we have much lower Quorum requirements
and rather loose rules with respect to Absentee, Early or Proxy
Voting. Here we open the door simultaneously to mischief and
potentially impose considerable costs to administer the various voting
mechanisms, especially Proxy Voting.
The task is to balance the Quorum requirements with the rules for voting
and counting attendance, in a manner that is attuned to the organizations
needs, behaviors and associated risk, encourages participation, and
debate, all of which can be accomplished at a reasonable cost and level
of organizational effort. Unfortunately there is no prescription or
formula for setting Quorum Requirements or establishing methods of voting
for members who cannot be physically present at the time/place of voting
-- or to incorporate these latter forms of voting into the process of
counting those "present" toward meeting Quorum
Requirements.
Quorums and Proxy Voting in Sun City, Texas
The particular question for us in Sun City Texas is how Quorums and Proxy
Voting should be applied in our general sessions. At present, our
By Laws set a Quorum Requirement of 25% for General Meetings and 50% for
Board Meetings; the NRO Quorum Requirement is such that whoever shows up
at the meeting can conduct the business of the organization. Proxy
Voting is confined to the General Meeting, and, even in that case, rather
carefully prescribed and limited. (See the following Extracts from
Sun City Texas Community Association By Laws for details.)
There are two changes to the By Laws being considered: the first would
lower the Quorum requirement to 10%; the second would eliminate the use
of Proxy Voting. Taken together, they move in opposite directions
with respect to flexibility and risk, and may therefore constitute a
balance. Specifically, lowering the Quorum Requirements gives the
organization a better chance of having enough members at each general
meeting to conduct business, but it also increases the possibility that a
minority/radical group could seize the agenda. On the other hand,
by eliminating Proxy Voting, the ability of a minority/radical group to
expand its influence inordinately is limited.
Equally important, eliminating Proxy Voting might eliminate
the cost of conducting and monitoring/controlling the Proxy-validation
process. That, in and of itself, and without regard to any changes
in the Quorum requirement may be worth considering.
Extracts from SunCity Texas Community Association By Laws
Quorum Requirements
For General Meetings: Except as otherwise
provided in these By-Laws or in the Declaration, the presence of Members
holding 25% of the voting power in the Association shall constitute a
quorum at all meetings of the Association. Members present at a
duly called or held meeting at which a quorum is present may continue to
do business until adjournment, notwithstanding the withdrawal of enough
to leave less than a quorum, provided that at least 15% of the Members
originally in attendance remain, and provided that any action taken is
approved by at least a majority of the votes required to constitute a
quorum.
For the Board of Directors: At all meetings of the Board, a
majority of the directors shall constitute a quorum for the transaction
of business, and the votes of a majority of the directors present at a
meeting at which a quorum is present shall constitute the decision of the
Board, unless otherwise specifically provided in these By-Laws or the
Declaration. A meeting at which a quorum is initially present may
continue to transact business, notwithstanding the withdrawal of
directors, if any action taken is approved by at least a majority of the
required quorum for that meeting. If any meeting of the Board
cannot be held because a quorum is not present, a majority of the
directors present at such meeting may adjourn the meeting to a time not
less than five nor more than 30 days from the date of the original
meeting. At the reconvened meeting, if a quorum is present, any
business, which might have been transacted at the meeting originally
called, may be transacted without further notice.
For the NRO: At all meetings the NRO members present shall
constitute a quorum for the purpose of transacting business?
Proxy Voting
The By Laws allow Proxy voting in General Meetings but not within
the Board of Directors or the NRO. The statement with respect to
general meetings follows:
Each proxy shall be in writing, dated, signed and filed with the
Secretary prior to the meeting for which it is to be effective.
Proxies may be delivered to the Secretary by personal delivery, U.S. mail
or telecopy to any Board member or the professional management agent, if
any. Unless otherwise provided in the proxy, a proxy shall cover
all votes which the Member giving such proxy is entitled to cast, and in
the event of any conflict between two or more proxies purporting to cover
the same voting rights, the later dated proxy shall prevail, or if dated
as of the same date, both shall be deemed invalid. No proxy shall
be valid more than 11 months after its execution unless otherwise provided
in the proxy. Every proxy shall be revocable and shall
automatically cease upon conveyance of the Member's Lot.
Your comments are welcome. Your input is
valuable.
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