Virtual AGMs

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Rhonda Scharf and Bob Parker discuss the impact that stay-at-home orders and gathering limitations are having on Annual General Meetings (AGMs)

Rhonda is a guru on meeting minutes, and she calls Bob “Bylaw Bob” because he understands meeting governance exceptionally well. They chatted about what we are dealing with in light of the recent pandemic and how it has impacted meetings.

Rhonda:

AGMs are often the only time members of not-for-profit organizations ever come together. Obviously, we can’t gather in most places worldwide right now, and virtual is our only option. But is it even legal for us to have a virtual AGM?

Bob:

This is a great question, as there is more than one possible answer. Bylaws are always the first place to go to see if you can do something or not. Check your bylaws to see if you have included an article or section allowing for this type of a meeting and, if so, how it can take place. The bylaws will always overrule the other options. If you have it included, you are good to go. If not, read on (and be sure to amend your bylaws at some point in the near future).

If there is nothing in your bylaws, you may still be able to have a virtual meeting. Many jurisdictions, both province/state, and federal, have issued orders and directives to allow virtual AGMs if those meetings ‘must’ fall within the current emergency order timeframes. A quick Google search for your jurisdiction should provide some options.

You may choose to hold your annual meeting at the same time each year but could still extend it and stay within the legal time frame. Often the guideline is within 120 days from your year-end, up to almost a year depending on the legislation you fall under. In this case, the emergency order’s wording may suggest that you postpone your meeting to a future date if possible.

In short, if you don’t have any guidelines in your bylaws, and your meeting does not follow any emergency guidelines, then essentially a virtual AGM would be illegal.

Rhonda:

While not everyone follows Robert’s Rules of Order (which is the most widely used manual of parliamentary procedure in the United States), is there anything in Robert’s Rules to help us with this?

Bob:

Robert’s Rules of Order are to be used for guidance in the operation of your meetings but are not considered laws. Your bylaws may allow for Robert’s Rules to be referenced, but they cannot conflict with your bylaws. If your bylaws do not allow for something, nor does your governing Act, then Robert’s Rules is of no help.

That said, Robert’s Rules of Order will be releasing its newest version (12th edition) in September 2020. The current version (11th edition) was released about 10 years ago and has only references to electronic or telephonic voting and such. The new revised version will give some guidance on virtual meetings.

To that end, Robert’s Rules’s official website is providing free, for download, the section on virtual meetings in advance for those looking for what they may want to consider in their bylaw amendments, and there are plenty of things you might not think about immediately. Check out their website at robertsrules.com to download the guidance.

If your organization is following a different parliamentary procedure, check out whether they have incorporated any updates regarding virtual and electronic meetings.

Rhonda:

What can we do to make our meeting legal before our next AGM?

Bob:

If your governing Act does not allow for virtual meetings, and you are not under an emergency order, you need to make a bylaw amendment. Following your usual procedure of amending bylaws is your first order.

I can hear the rumbling now, “How can we change our bylaws to have virtual meetings if virtual gatherings are illegal?”

Each jurisdiction may respond differently, but a general guideline to follow is: “Any resolution signed by all the members entitled to vote is a valid resolution.” The rationale is that if every member agrees, then, of course, that is the will of the members.

Note:

This guideline is written into the Canada Not-for-profit Corporations Act, as well as provincially in Ontario. Both Bob and Rhonda feel it is likely you would find it, or something similar, in many Acts around the world. Follow the governing Act for the jurisdiction your organization is incorporated within. If you are legally incorporated in a province/state, then use that Act, and the same if you are federally incorporated, use the federal Act.

Bob:

This guideline states that you do not need to have a meeting to pass a bylaw amendment. You would need every member who has a vote to sign off on it. Let me be clear, this is not a majority of the members, it is 100% of the voting members, and I would keep the records of any such vote. For some very large organizations, this may not be practical. Still, we are hoping that you’ve already amended your bylaws to allow for virtual meetings if you are a very large organization.

Your options would be a mail-in form, or a virtual signature via email (if legally permitted). This is time-consuming and tracking down the last hold-out member could be a nightmare.

If your bylaws permit the use of proxies, you may be able to call a Special Meeting for the purpose of a bylaw amendment (assuming you can obtain a quorum). There are different rules on proxies for each type of organization. You will be required to confirm whether proxies count toward a quorum, to minimize the number of people required to meet. Look at your bylaws and your respective Acts for guidance on this workaround.

How to run virtual AGMs

Rhonda:

Proxies could help make in-person meetings still obey the gatherings limitations in some situations. I could have 10 people give me their proxies, right? Do proxies count toward quorum?

Bob:

That does depend on the type of Act your organization is governed by, and they will vary. Condominium Acts usually allow for proxies to count toward quorum, as members who own vacation homes are often absent. It is not unheard of to have a condominium where few owners reside in the building. However, under standard not-for-profit guidelines, if your bylaws do not provide the answer, I would not include proxies for quorum – only those entitled to vote, as it establishes a dangerous precedent. If you cannot achieve quorum of enough members that are eligible to vote, then you should hold the meeting at another time.

The purpose of any members’ meeting is to discuss issues that affect the members’ rights and privileges, and ensuring they have an appropriate opportunity to speak on any issue is of paramount importance. In fact, Robert’s Rules states that proxies are not permitted in ordinary deliberative assemblies. If your organization has adopted Robert’s Rules of Order or the Standard Code of Parliamentary Procedure, then proxies are automatically prohibited unless they are legally required. This does sound like a bit of a conflict and quite frankly, it is, so this now becomes a good conversation to have with a lawyer that understands your jurisdiction, should you be concerned.

As to your question about holding 100 proxies, do those 10 ‘votes’ count as 10 toward quorum; I say ‘no.’ Not in a not-for-profit membership assembly.

Now, here is the trick. In some jurisdictions, like Canada, a proxy can be given to another person who is not a member, providing them with the right to vote. A non-member holding a member’s proxy does count toward quorum.

That wouldn’t help if we had physical gathering limitations, but when we get back to in-person meetings, there are some situations where a non-member would count towards quorum.

Rhonda:

Let’s say we can legally hold a virtual meeting; how do you keep track of quorum?

Bob:

Look to see what your bylaws say about quorum requirements. Most share what is needed to establish quorum, and rarely what to do if it is not maintained. If you have guidance in your bylaws on both of these, then, of course, follow those.

Some organizations must legally follow specific parliamentary procedures based on governing Acts. Be sure to reference these as they may have minimum requirements to maintain quorum.

For everyone else, and I would say that is the majority, once quorum is established, there is no need to worry about continually maintaining it. Once a quorum is declared, the meeting can continue until it is adjourned. It would be up to the voting members present should they decide, “in the best interests of the association,” to vote to adjourn the meeting. Passing motions and resolutions is based on voting members present, and not on quorum.

Robert’s Rules may have some disagreement with me, but again I refer to both federal and provincial Acts in Canada, which detail that quorum does not need to be maintained through a meeting. These serve as a good frame of reference for you to do your homework on your own Acts.

Your greater challenge, of course, is to determine what 50% + 1 is at any moment to pass a resolution. Where a show of hands, or “yeas and nays” are the standard form of voting on a resolution, these become very difficult in a virtual meeting. Ensure you have a process outlined in your bylaws for how virtual voting works. Keep in mind that you may not be able to “see” everyone.

Electronic polling is a good option to consider. However, these also have their limitations. In a general assembly, seeing how others vote does have an impact on how some others may ultimately vote. We’ve all seen the hesitation around the room when a vote is called. Members scan the room to survey where the vote is going before raising their hand. This has more to do with maintaining a spirit of consensus than merely voting, and it is crucial to the health of the assembly. If every vote was a contentious one, then you see a polarization very quickly among the membership. You don’t have to look too far from politics to see this polarization play out poorly over time.

My suggestion is not to overuse polling while passing motions or resolutions just because you have the tool. If the Chair is relatively confident it will pass without any resistance, then simply asking for any opposed would be entirely fair and wise, in my opinion. Upon hearing any resistance, the Chair may wish to keep the discussion going, or move to a poll to close the issue.

Rhonda:

What are the minimum requirements for an AGM if we decide not to host one virtually?

Bob:

If virtual meetings are not your ideal or best-suited method, then I would recommend paring things back to the absolute minimum.

You need the following:

  1. Quorum (as stated in your bylaws)
  2. Consideration of Financial Statements;
  3. Auditor’s Report;
  4. Election of Directors (if required by your bylaws);
  5. Appointment of Auditors
  6. Anything else that your bylaws require

All other items can be tabled until the next AGM if desired. However, if you have written reports, minutes, etc. that can be forwarded to the members in advance, along with the financial statements, I recommend those be sent. Until you have some rules in your bylaws to govern your virtual meetings, I would attempt to keep this meeting as efficient and short as possible.

Rhonda:

Can we just delay our AGM until we can all get together again?

Bob:

Maybe. Emergency orders may allow an extension to when we can gather again, so be sure to check on those. For many organizations, to maintain their legal or charitable status, they are required to complete these meetings on time. Extensions are not unheard of either through your governing ministry/department or the judicial system.

Don’t get stressed if the timing doesn’t work out between your legal requirement and the practical means of getting your members together. I’m certain your government wants you to be as compliant as you desire to be, so don’t be afraid to ask for extensions if needed.

Rhonda:

Let’s assume we do have a virtual meeting. Do I need to “see” participants onscreen (using Zoom or Microsoft Teams)? Would a phone connection be enough?

Bob:

It is likely that even if everyone does have a video camera, they won’t all show up on your screen at the same time. So, in this respect, a phone connection is no different, in my opinion, than being able to see someone. As long as you have the means to allow everyone the opportunity to speak, you should be fine.

Rhonda:

Do we need to record our AGM if we host if virtually?

Bob:

No. While you might think that it couldn’t hurt, I’m going to suggest that it could “hurt” later, so don’t. I would not recommend it.

When (the) Chair makes a declaration of a motion being passed, it is passed. It can only be reconsidered again within that meeting by proper order. There is no benefit to recording the meeting, which may open up a vote or discussion to scrutiny after the meeting is adjourned. If a member wishes to have a say, it is their right and responsibility to attend the meeting and voice their opinion, or by appropriate means outlined in the bylaws, when the meeting happens, and not after the fact.

It is not generally the best practice to use recordings to take minutes after the fact. These should be done while the meeting is in progress.

Rhonda:

I also discourage recording devices, and certainly don’t recommend them to be used to create minutes, either. I can tell when a minutes document was created from a recording. It is unreasonably long and detail-oriented. A recording of any sort makes it too easy to get tied up in knots about the details that didn’t have much impact in the live meeting.

Rhonda:

What kind of notice do we need to send to members if we are changing our meeting from in-person to virtual?

Bob:

Since a virtual meeting requires no travel, I would err on the side of giving the same amount of notice as any AGM. If you typically provide 30 to 60 days, then immediately issue a cancellation of the face-to-face AGM, along with a new notice of the virtual meeting for 30 to 60 days from the date you plan to hold the new virtual AGM. Emergency orders will likely provide for the needed extension if you are close to your legal deadline for the meeting.

Bob Parker is a speaker, author and facilitator. He has served on local, regional, national, and international boards of directors in the not-for-profit sector, along with providing strategic planning facilitation and consulting services. He is recognized for his expertise in helping international Fortune 500 organizations develop high-performing cultures with his signature program, The Pit Crew Challenge. You can find more about Bob at pitcrew.ca.

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About Author

Rhonda Scharf

Rhonda Scharf, CSP, HoF is a Certified Speaking Professional, Hall of Fame, trainer and author based in Ottawa. She helps organizations feel motivated and educated through her interactive, realistic and fun training programs and keynote speeches. If your team needs a boost by increasing their effectiveness and efficiency, then Rhonda will get you ON THE RIGHT TRACK (www.on-the-right-track.com). Rhonda is the author of Alexa is Stealing Your Job, available now on Amazon. Rhonda is speaking at Executive Secretary LIVE Wellington, May 2021. For further information and to book, visit www.executivesecretarylive.com.

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