Planning for Virtual Proxies

Best defense. Now that virtual annual meetings are the norm, boards need to pay special attention to proxy voting, which is the assignment of a shareholder’s or unit-owner’s vote to another person. Case in point: The Landmark Condominium in Port Chester, N.Y., which, in its in-person annual meeting past, has had duplicate proxies submitted by unit-owners. 

Joe Nardo, the president of Nardo & Associates who manages Landmark’s 199 units, decided to take pre-emptive steps: “After New York amended the Business Corporation Law to allow all-electronic meetings, we felt we needed a mechanism to validate everyone’s digital identification.” Nardo came up with a two-step solution. First, he emailed a one-page authorization form to unit-owners one month before the annual meeting, asking them to designate a specific email address that their vote would come from. “We kept it short but explained that they needed to respond in order for their vote to count,” he says. Second, after a meet-the-candidates night that was held on Zoom one week before the meeting, he sent out ballot forms as well as the directed proxy forms. “Anyone who wanted a proxy to cast their vote had to designate the proxy person’s name and email address,” he says. “Because everything was done by email, that basically gave us a digital signature and a date stamp for both steps of the process.”

Speedy results. The deadline for submitting proxy votes was three days before the annual meeting. “The proxies, along with the list of authorized email addresses, were given to a third party, which happened to be the association’s accountant,” Nardo says. After verifying that the proxy votes came from the authorized email addresses, the firm tabulated the results.

That enabled the board to announce the final election results on the night of the annual meeting. “Once all the regular votes came in and were tabulated automatically, we were ready to go, because the proxy votes were already compiled,” Nardo says.

Advance verification is a simple way to ensure that people participating in virtual voting are who they say they are. Coupled with the complexities of proxy voting accuracy, Nardo’s two-step process might be especially useful for buildings with a history of contested elections. In fact, the Landmark’s board election using the procedure was challenged in court by a group of disgruntled unit-owners — unsuccessfully. “There are always people who will try to out-maneuver you,” Nardo says. “But this was a good system.”