Introduction
The Community Association Board of Directors gave the
Special Projects Committee the charge to review and recommend changes in the
Community Association (CA) bylaws and CC&Rs. There has been a lot of
discussion and exchange of opinions on several of the sections of the
bylaws. Over the next three weeks we will send out three articles on:
1.
Quorum Requirements,
2.
Proxy Voting
3.
Counting Proxy Votes Toward Meeting
Quorum Requirements
4.
Quorums and Proxy Voting in Sun City
Texas
(Items 3 & 4 are combined in the
last article.)
Steve Fought researched and wrote
the articles. Steve and John Winslow co authored an earlier article on
cumulative voting. We hope you find the articles interesting and
informative.
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.
Quorum Requirements
A QUORUM is the minimum number of
members who must be present to conduct the business of the organization.
The most common quorum requirement, and the default in instances where a quorum
is not specified, is 50% of the eligible voting members. The Quorum
requirement is usually specified in the By Laws. Although the Quorum is
the minimum number required to be present to conduct the business of the
organization, it is fairly common for organizations to set higher levels of
participation for particular types of decisions, and to allow certain types of
business to be conducted without a quorum being present.[1]
By setting Quorum Requirements, organizations accomplish
several goals.
· First,
Quorums assure visibility on organizational decision making.
· Second,
Quorums assure a base of support for organizational decisions -- at least
numerically.
· Third,
Quorums buffer against "radical" decisions that might otherwise be
taken by minority, but active, members.
Because Quorums assure a numerical base of support,
organizations sometimes increase the Quorum Requirements on controversial (and
politically unpleasant) decisions such as levying assessments, increasing dues,
or even making changes in By Laws -- thereby increasing the base of support
along with the visibility on these more contentious issues.
As common and useful as Quorums are
organizations sometimes have difficulty generating a Quorum for even annual
meetings; yet the business of the organization must go on. In these
cases, organizations can opt to permit those members present to conduct the
routine business of the organization subject to ratification of these decisions
at the next meeting where a Quorum is present.
Another method for dealing with lack
of attendance at governance meetings is to create an Executive Committee of the
Governing Board. The Executive Committee, which is usually comprised of
the officers of the governing board and, if applicable, the (non-member)
General Manager, is then empowered to implement policy decisions already agreed
to and/or to make "operational" decisions that are beyond the purview
of the General Manager.
Some organizations (such as
Homeowners' Associations) set Quorum Requirements in the 20% or so range.
The logic supporting that approach is that these organizations habitually have
a lower level of participation in governance, as reflected by voting patterns
in general elections and attendance at membership meetings. By setting
lower Quorum Requirements, however, organizations run a risk that small numbers
of voters can band together and achieve outcomes that could not be produced if
higher requirements existed, and/or results counter to the views of the overall
majority of members.
In setting Quorum Requirements, one
of the most difficult tasks is to strike a balance between the needs of the
organization for visibility and a base of support for decisions, and the actual
practice of participation of the members at meetings where a Quorum requirement
is set. If the Quorum requirement is set too high, the business of the
organization cannot be carried out, unless some sort of "work around"
is created (as mentioned previously). If the Quorum requirements are set
too low, the membership can lose visibility into the decision making process,
the organization is not assured of a base of support to its decision, and the
whole process is more vulnerable to the actions of active, minority,
participants who might otherwise not be able to gather support for their
propositions under a higher Quorum requirement.
The main topic for our next newsletter will be Proxy
Voting. We value your input so please let us know your thoughts.
[1.] For the purpose of this paper, we are going to assume that each member in the organization has a single vote and that all votes count the same -- that is, the paper does not address special categories of memberships, as might be the case in some corporations. The legal review, however, would have to deal with this issue.