Today, many charities are unable or unwilling to hold board meetings or membership meetings in person due to social distancing requirements and are considering, perhaps for the first time, conducting virtual board meetings.
Between the complexity of mastering Zoom and figuring out the most flattering lighting, many directors may not realize that their organization’s articles or bylaws do not permit virtual meetings. In most states, such prohibitions should be addressed to protect the legality of the meeting. Other states have passed emergency measures to permit electronic meetings during the pandemic regardless of whether they are authorized by the board.
Law on Virtual Board Meetings
For example, Arizona law, like the laws of most states, authorizes boards to permit directors to participate in meetings through the use of any means of communication by which all directors participating may simultaneously hear each other during the meeting.
However, if the articles of incorporation or bylaws prohibit electronic meetings, such meetings may be deemed unauthorized. Accordingly, Arizona boards should check their articles and bylaws to determine whether they prohibit electronic meetings and if they are prohibited, they should consider amending their governing documents to allow it.
Similarly, Arizona law permits members to vote online unless the corporation’s articles or bylaws prohibit it. Note that there are strict requirements in the statute for online member voting.
To address similar legal impediments in Washington, Washington’s Governor, Jay Inslee, has taken emergency measures to make it easier for nonprofit organizations to hold different forms of electronic meetings.
In Washington, nonprofit corporations may hold board meetings or membership meetings using any electronic means in which all participants may hear each other simultaneously. In normal conditions, nonprofits can disallow electronic meetings in their articles or bylaws.
Proclamation 20-51 by Governor Inslee overrides nonprofits boards’ authority to demand in-person meetings provided that, for the duration of the emergency COVID-19:
- Membership votes can be taken by mail, electronic transmission, or proxy, irrespective of whether the articles or bylaws allow such membership votes.
- Members’ or board meetings may be conducted electronically (i.e., by telephone or videoconference), even though electronic meetings are not allowed by a nonprofit corporation’s articles of incorporation or bylaws.
Now is the time to determine your organization’s ability to legally hold virtual meetings and to arrange for governing document amendments if necessary.
Ellis Carter is a nonprofit lawyer with Caritas Law Group, P.C. licensed to practice in Washington and Arizona. Ellis advises nonprofit and socially responsible businesses on corporate, tax, and fundraising regulations nationwide. Ellis also advises donors with regard to major gifts. To schedule a consultation with Ellis, call 602-456-0071 or email us through our contact form.