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We are a board of seven, and are historically divisive.
At a board meeting last week, one member was absent and another had resigned that same day. This made a meeting of five.
Although it was not on the agenda, a motion was made to assign the now-vacant seat to the next candidate who ran in the last election. Incidentally, this candidate lost by an extremely large margin of shareholder votes, an indication that they did not want her to serve. This person had served previously and conducted herself in an extremely hostile and negative manner. Nevertheless, the motion was voted on and approved 3-2.
My question is this: Since this was not an agenda item and was not time-sensitive, was it ethical to conduct a vote on the subject without input from the full board? Please note I did say ethical, as apparently it was legal.
Thanks for any help from the coop community.
I would be happy to answer this. There was a board meeting in the morning which is when the Managing Agent told us of a board member resignation. That left six members out of seven. One of the members was absent from the meeting, thereby giving us a quorum of five. The decision was made to appoint the next person who ran for a position at the last election. The last election called for four opened spots. Five people ran, four got on. So at this last board meeting the decision was to bring on the fifth person who ran to fill the vacant spot and showed interest. That is legal. The majority of the board can appoint for a vacant spot. Which was done and was in compliance.
Again, my only concern is what do the bylaws say about filling a vacant seat. If you were in compliance, then, of course, it is legal and ethical. However, if your bylaws give a different description of the process of filling a vacant seat then you are not. Were the actions in compliance with the bylaws?
Here is a copy of the By-Laws which were followed: The President did not like the outcome, thereby now saying it was not legal and is trying to circumvent the By-Laws: Reading this what is one's opinion? Thank you.
Section 4.4 p.268 "Vacancies in the Board of Directors resulting from death, resignation or otherwise may be filled without notice to Tenant-Shareholders by a vote of a majority of the remaining directors present at the meeting at which such election is held even though no quorum is present."
Section 4.6 p. 268 "The vote of a majority of the Board of Directors present at the time of a vote or a duly constituted meeting shall be the act of the Board of Directors."
On a board of seven, the quorum is 4. Not three. Regardless of resignations or absenteeism. Correct me if I'm wrong!
There was a quorum of 5 to answer your question. You are correct a quorum is always half plus 1.
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Before determining ethical, find out if it is legal. You said that it was apparently legal. What do your bylaws say about filling vacant seats. Some require an appointment, with majority of existing board agreeing, others a special election. In other words, how is this handled according to the laws you live under. If there is an appointment, there should be an interview with interested parties and then a decision after discussion. Were you specifically informed at the meeting that what was happening was in compliance with your bylaws? If it is legal, then, unfortunately there would be nothing unethical since the board would be in full compliance.
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