Isabella Carter
Bylaws outline the processes and operating procedures for an association and are subject to interpretation only when ambiguity arises. Voting on bylaws is a formal process that is unique to each association. It typically requires a majority vote of the board of directors or a two-thirds majority of the members. This process may include electronic voting, depending on the rules of the organization. When changes to the bylaws are necessary, members can propose amendments, which then become a general order of business at the meeting during which they are proposed.
| Characteristics | Values |
|---|---|
| Voting on bylaws | Requires a majority vote or a two-thirds majority vote |
| Can be done by mail, phone, or other electronic methods | |
| Can be done via email, but this is considered an electronic proxy vote, which is illegal in many states | |
| Can be done in person or by proxy | |
| Requires previous notice that a vote will be taken on an amendment | |
| Requires submitting the amendment to the board or through a bylaws committee | |
| Requires a formal motion, a second, and is debatable | |
| Requires a majority vote to establish other committees | |
| Requires a majority vote to determine the number of directors | |
| Requires a majority vote to determine the quorum | |
| Requires a majority vote to determine the indemnification | |
| Interpreting bylaws | Cannot be done if the meaning is clear |
| Must take into account the original intent of the bylaw | |
| Must not create a conflict with another bylaw |
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What You'll Learn
Voting on bylaws: what constitutes a quorum?
A quorum is the minimum number of members of a group necessary to constitute the group at a meeting. In a deliberative assembly, a quorum is required to conduct the business of that group. Quorums are often required by traditional handbooks of parliamentary procedure, such as Robert's Rules of Order.
According to Robert's Rules, the quorum definition is the minimum number of voting members who must be present at a properly called meeting to conduct business in the group's name. It should be a number large enough to be depended upon for being present at all meetings when the weather is not exceptionally bad. The quorum may also be set by law.
The quorum is usually set by the organization's bylaws. For example, the bylaws of the Society of Critical Care Medicine, a California nonprofit, list its quorum requirements as 75 members eligible to vote must be present. In another example, the bylaws of Apple (AAPL) define its quorum as the majority of shareholders in attendance, in person or by proxy, who are entitled to vote on related matters.
In the context of voting on bylaws, a quorum is necessary to conduct the vote and for the results to be considered valid. If a quorum is not present, the meeting may be adjourned, or the members in attendance may be allowed to conduct a limited number of actions on behalf of the company. If a quorum exists at the beginning of a meeting but is lost during the meeting, the chair should state the loss before taking any vote.
It is common for bylaw amendments to require at least a 2/3 majority of voter support to be passed. This high number of approval votes required is because bylaws are an agreement as to how an association will be run, so amending them amends the agreement that everyone has already agreed to.
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Voting methods: in-person, electronic, or by proxy
Voting on bylaws can be done in-person, electronically, or by proxy, depending on the rules of the organisation. Bylaws are rules unique to each association, outlining the processes and operating procedures that govern how an organisation is run.
In-person voting
In-person voting is a traditional method where voters physically attend a meeting or polling station to cast their vote. This method allows for direct participation and can be applied to various voting scenarios, including shareholder meetings, board meetings, and general elections.
Electronic voting
Electronic voting offers a convenient alternative to in-person voting, allowing voters to cast their votes remotely through digital means. This method can include voting by email, online portals, or mobile applications. While electronic voting improves accessibility, it also raises concerns about security, vacancy, and missed submissions.
Proxy voting
Proxy voting is a voting method where a member of a decision-making body delegates their voting power to a representative, who casts a vote on their behalf. This method is particularly useful when a voter is unable or chooses not to attend a meeting or vote on a specific issue. Proxy voting can be done by mail, phone, or online, and it is commonly used in shareholder meetings, corporate governance, and during emergencies, such as the COVID-19 pandemic.
The process of proxy voting typically involves the following steps:
- The principal (the person delegating their voting power) designates a proxy (the representative) to vote on their behalf.
- The proxy receives proxy materials, including a proxy statement or proxy card, which outlines the issues to be voted on and provides voting instructions.
- The proxy casts the vote according to the principal's directions, which may include responses such as "For," "Against," "Abstain," or "Not Voted."
- The proxy vote is then counted along with other votes to determine the outcome of the election or decision-making process.
Proxy voting is a flexible option that ensures participation even when individuals cannot be physically present. However, it is important to note that proxy voting may not be allowed in all situations, and its use may be limited by specific rules or attendance requirements.
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Majority votes vs. two-thirds majority votes
Voting on bylaws can constitute a general order. Bylaws outline the processes and operating procedures for an association. They are subject to interpretation only when ambiguity arises. When one change or a few changes to the bylaws are necessary, members can present these as individual amendments. These amendments are then voted on.
Majority votes and two-thirds majority votes are two different types of voting systems. A majority vote, or more than half the votes cast, is a common voting basis. A two-thirds majority vote is a voting system where at least two-thirds (66.67%) of the total votes cast are required to approve a particular motion or decision. This requirement can be qualified to include the entire voting body or simply the board members voting on a particular issue.
A two-thirds majority vote is often used when voting on major initiatives as it requires a broad level of consensus and ensures that major changes or actions are supported by a substantial majority of members. This type of voting is also known as a supermajority. Common supermajorities include three-fifths (60%), two-thirds (66.666...), and three-quarters (75%). In most cases, if the supermajority fraction or percentage of votes yields a non-whole number, it is rounded to the next higher whole number.
A majority vote is used in various situations, such as establishing other committees and quorum requirements. For example, a majority vote of the membership can establish other committees, and a majority of the total voting power of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of the shareholders.
The type of voting system used depends on the specific situation and the requirements outlined in the bylaws. It is important to review and update bylaws periodically to ensure they remain relevant and effective.
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Special interests: when board directors cannot vote
Voting on bylaws does not constitute a general order. Bylaws are subject to interpretation only when ambiguity arises. If the meaning is clear, not even a unanimous vote can impute a different meaning. In other words, if you want a bylaw to have a different meaning, you have to amend it.
Board directors have voting rights at board meetings unless they have a special interest in the voter resolution. For instance, in the case of staff reductions and performance evaluations, voting by employees is considered a conflict of interest. Directors who are not shareholders cannot vote at the AGM/EGM.
In some cases, board members may believe that a motion isn't worth discussing. If a motion is not supported, it will not be discussed. The board chair opens the meeting to discuss a motion once it has been made and seconded. The board chair is responsible for granting members the right to speak, move motions, and express a position. They then invite a vote. Each board member will vote in one of three ways: "Yea", "Nay", or "Abstain". Abstentions are counted as "yes" in board voting.
In the case of nonprofits, honorary members are not considered board members and are not voting members. Nonprofit board bylaws provide guidelines for board candidate eligibility and selection.
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Amending bylaws: the process
The process of amending bylaws can vary depending on the type of organisation and the specific rules outlined in its existing bylaws. However, there are some general steps and principles that are commonly followed when it comes to changing bylaws.
Firstly, it's important to note that bylaws are a set of rules that outline the processes and procedures for an association, organisation, or corporation. They are essentially an agreement on how the group will be run, and as such, they should be reviewed and updated periodically to ensure they remain relevant and effective.
When it comes to making changes to bylaws, the process typically begins with a proposal for an amendment. This proposal can come from members, board members, directors, or shareholders, depending on the structure of the organisation. In some cases, a formal motion must be proposed and seconded before it can be debated and voted on. It is common for bylaw amendments to require prior notice, allowing members to be informed and prepared for the vote. This can be done through written or oral communication, depending on the specific rules of the organisation.
Once the proposal has been made and notice has been given, the amendment becomes a general order of business. This means it is officially on the agenda and will be discussed and voted on during the meeting. The specific voting process can vary, but it typically requires a majority or two-thirds majority vote to pass an amendment. It's important to note that some bylaws may require a supermajority, or a higher threshold of votes, to pass certain types of amendments.
During the voting process, it's important to ensure that the quorum requirements are met. A quorum refers to the minimum number of members or voting power that must be present for a valid decision to be made. In some cases, organisations may allow for remote or electronic voting, including by mail, phone, or online methods. However, it's important to consider the security and legality of these methods, especially for organisations with strict requirements.
After the vote has been conducted, the results are typically undisputed, and the amendment is adopted immediately unless otherwise specified. However, it's important to note that the process of amending bylaws may vary depending on the specific rules and laws that govern the organisation. Therefore, it's crucial to refer to the existing bylaws and relevant laws when initiating and executing any changes.
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Frequently asked questions
The voting process for bylaws can vary depending on the organisation. Typically, board members vote on whether to support or object to a bylaw amendment or any other issues at a board meeting. Some bylaws require a two-thirds majority to be passed, while others may require a simple majority.
Yes, bylaws can be amended through a formal process. Members can propose amendments, which typically require prior notice and may need to be submitted through a committee or board. Amendments can be made through a majority vote, and the process should be outlined in the bylaws.
A quorum is the minimum number of members or shareholders required to be present at a meeting for it to be considered valid. The number constituting a quorum can vary, but it is typically a majority or at least one-third of the voting members. Quorum requirements may apply to voting on bylaws to ensure sufficient participation and representation.
In some cases, electronic voting may be permitted for bylaw amendments, especially if allowed by the governing body or specified in the bylaws. However, email voting may be considered insecure and is illegal in some states for electronic proxy votes.
