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Issue Spotlight – Electronic Voting by Nonprofit Boards in Virginia

As nonprofits seek both to increase their use of technology and to operate at maximum efficiency, many are wondering how their boards of directors can utilize e-mail voting to make decisions both at and between regular board meetings.

At this time, most states do not allow e-mail voting to constitute action of a board of directors, since e-mail alone does not give board members the same opportunity to deliberate as a face-to-face meeting does. However, as technology continues to advance, and as the ability to conduct electronic meetings using telephone or videoconference has become a reality, such technologies may be combined with the use of e-mail as a means of voting during a board meeting. Additionally, provisions allowing for a board of directors to take action under certain circumstances without a meeting, may allow for voting by e-mail or other electronic communication in such instances.

In an effort to clarify this issue for Virginia nonprofits, below please find an explanation of what current Virginia law allows, and why. Sample bylaw provisions are also provided.

In order to understand the constraints surrounding e-mail voting, one must first understand three related aspects of board governance:

What constitutes a "meeting" of the board,
How voting may occur during a board "meeting," and
How voting may occur in the absence of a board "meeting."

Each of these is addressed by Virginia law and should also be addressed in the bylaws of every nonprofit organization.

Defining a "meeting" of the board of directors

In order for the board of directors to conduct business at a board meeting (1) a quorum [see footnote 1] must be present and (2) all directors must be able to participate simultaneously and hear each other during the meeting. Va. Code Ann. §§ 13.1-864, 13.1-868. Additionally, while regular meetings of the board of directors may be held without notice of the date, time, place or purpose of the meeting (unless the articles of incorporation or bylaws provide otherwise), special meetings of the board of directors require notice [see footnote 2] (such notice may be given by a form of electronic transmission consented to by the director to whom notice is given). [see footnote 3] Va. Code Ann. § 13.1-866. These requirements ensure fairness and equity and prevent a small minority of members from taking action.

This definition does allow for the use of telephones or videoconference during meetings, either in the form of a conference call, or by having individual board members call in and participate by speakerphone. From a legal perspective, a director who participates in a meeting by telephone or videoconference is considered present. Generally, then, if enough board members are participating to constitute a quorum and, if required, have proper notice, business can be conducted because everyone can hear and join in the discussion.

Voting during a board meeting

Assuming that the above requirements for a board meeting are met, votes may then be taken by voice, a show of hands, or in writing. If the board is meeting by conference call, the usual practice is to cast votes by voice. Although not expressly authorized by Virginia law, presumably it would also be allowable to ask directors to send their votes by electronic transmission, including by fax or e-mail, at the time of the vote, assuming that they have all been able to hear each other during the discussion preceding the vote. While a more cumbersome process, electronic voting does allow for anonymity, if desired for a particular decision.

When votes are cast by telephone, it is important that the chair ask not only for "YES" votes, but also for "NO" votes and "Abstentions". When everyone is physically gathered around the table, it is easy to determine if a vote is less than unanimous. If the board of directors is voting by telephone, they must take the extra step to ensure that every vote is accurately known and recorded.

Voting without a meeting

Virginia law permits directors to take action without a meeting if the action is taken by ALL members of the board. Va. Code Ann. § 13.1-865. The rationale for this is clear: since collective discussion is not possible without a meeting, it is not in the best interest of the organization to have only some of the directors making a decision independently, without such discussion. In the absence of debate, unanimity is essential.

Virginia law also stipulates that voting by the board without a meeting must be recorded by "written consent" – in other words, there has to be clear and specific written documentation that ALL board members participated in the decision and agreed with the action taken. Written consent is defined as a document that states the action taken, is signed by each director either before or after the action is taken, and is included in the official board minutes or filed with the corporate records reflecting the action taken. Thus, a unanimous written consent has the same effect as a vote taken at a meeting.

When might a written consent be used by a board of directors? One example is the approval of a new director. The board development committee could distribute its recommendation for a new board member, along with biographical information, to all current directors. This material would include a consent form approving the appointment of the new board member and a signature line; current directors would then each sign his or her form and return it by fax to the organization or the secretary.

Voting by unanimous written consent in lieu of a meeting is only appropriate if there is a high degree of consensus and no controversy is expected, as it allows for only a "YES" vote. It can also be more time-consuming, requiring follow up with individuals who do not respond. Remember: ALL board members must sign the written consent. Action taken without a meeting does not become effective until the last director signs the consent, unless the consent specifies a different effective date, in which event the action taken is effective as of the date specified therein, provided the consent states the date of execution by each director.

Using e-mail

Based on the three legal principles described above, it is easy to understand why the simple action of sending out a motion by e-mail, and collecting reply e-mail votes, does not constitute a meeting by a board of directors. It is clear that this method does not constitute a board "meeting" in which all members can hear each other and discuss the issue before taking action.

However, voting by written consent may be accomplished by the use of "electronic transmission" as defined in Va. Code Ann. § 13.1-803. This means that the consent form could be e-mailed to all directors, and returned with their signature via e-mail. Va. Code Ann. §§ 13.1-803 and 13.1-865. But again: as discussed above, ALL directors must sign the action.

Another potential use of e-mail to expedite board action might be to gain consensus via e-mail communication and then have the full board ratify the decision at its next meeting.

Sample bylaw wording

When drafting or updating organizational bylaws, it is recommended that each of these aspects of voting be addressed separately with clear and easily understood language. The following examples may be helpful:

Meeting Notice.

Unless otherwise stated in these bylaws, notice of any Board meeting must be given in writing and mailed to all directors at least five days before the date of the meeting.
Notice of a meeting may also be given by telephone, fax or e-mail at least two days before the meeting.

Telephonic Meetings.

The Board of Directors may permit any or all directors to participate in a regular or special meeting by any means of conference telephone or other communications equipment which allows all those participating to hear each other at the same time.
A director participating in a meeting by conference telephone or other communications equipment which allows all those participating to hear each other at the same time is considered to be present in person at the meeting, and shall be counted toward the required quorum.

Voting at Meetings.

Votes may be cast at regular or special Board meetings by voice, by a show of hands, or by written ballot.
A vote may also be cast by telephone, electronic mail, facsimile or another electronic transmission if the voting director is participating in a meeting by conference telephone or other communications equipment which allows all those participating to hear each other at the same time. For purposes hereof, a written consent and the signing thereof may be accomplished by one or more electronic transmission.

Action Without Meeting.

The Board of Directors may take action without a meeting if the action is taken by all members of the Board.
The action shall be documented by one or more written consents stating the action taken, signed by each director either before or after the action is taken, and included with all other board minutes or filed with the corporate records reflecting the action taken.
Action taken under this section shall be effective when the last director signs the consent unless the consent specifies a different effective date, and states the date of execution by each director.
Action taken by written consent shall have the same effect as a vote taken at a meeting of the Board.


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Home About VANNO Benefits & Services Member Directory Join Now News & Reports Reports Issue Spotlight VANNO Voice Advocacy Info Central Yellow Pages Tri-Cities Conference Are you a business serving VA nonprofits? Read the Virginia Nonprofit Sector Report Calendar Contact Us	News & Reports Issue Spotlight – Electronic Voting by Nonprofit Boards in Virginia As nonprofits seek both to increase their use of technology and to operate at maximum efficiency, many are wondering how their boards of directors can utilize e-mail voting to make decisions both at and between regular board meetings. At this time, most states do not allow e-mail voting to constitute action of a board of directors, since e-mail alone does not give board members the same opportunity to deliberate as a face-to-face meeting does. However, as technology continues to advance, and as the ability to conduct electronic meetings using telephone or videoconference has become a reality, such technologies may be combined with the use of e-mail as a means of voting during a board meeting. Additionally, provisions allowing for a board of directors to take action under certain circumstances without a meeting, may allow for voting by e-mail or other electronic communication in such instances. In an effort to clarify this issue for Virginia nonprofits, below please find an explanation of what current Virginia law allows, and why. Sample bylaw provisions are also provided. In order to understand the constraints surrounding e-mail voting, one must first understand three related aspects of board governance: What constitutes a "meeting" of the board, How voting may occur during a board "meeting," and How voting may occur in the absence of a board "meeting." Each of these is addressed by Virginia law and should also be addressed in the bylaws of every nonprofit organization. Defining a "meeting" of the board of directors In order for the board of directors to conduct business at a board meeting (1) a quorum [see footnote 1] must be present and (2) all directors must be able to participate simultaneously and hear each other during the meeting. Va. Code Ann. §§ 13.1-864, 13.1-868. Additionally, while regular meetings of the board of directors may be held without notice of the date, time, place or purpose of the meeting (unless the articles of incorporation or bylaws provide otherwise), special meetings of the board of directors require notice [see footnote 2] (such notice may be given by a form of electronic transmission consented to by the director to whom notice is given). [see footnote 3] Va. Code Ann. § 13.1-866. These requirements ensure fairness and equity and prevent a small minority of members from taking action. This definition does allow for the use of telephones or videoconference during meetings, either in the form of a conference call, or by having individual board members call in and participate by speakerphone. From a legal perspective, a director who participates in a meeting by telephone or videoconference is considered present. Generally, then, if enough board members are participating to constitute a quorum and, if required, have proper notice, business can be conducted because everyone can hear and join in the discussion. Voting during a board meeting Assuming that the above requirements for a board meeting are met, votes may then be taken by voice, a show of hands, or in writing. If the board is meeting by conference call, the usual practice is to cast votes by voice. Although not expressly authorized by Virginia law, presumably it would also be allowable to ask directors to send their votes by electronic transmission, including by fax or e-mail, at the time of the vote, assuming that they have all been able to hear each other during the discussion preceding the vote. While a more cumbersome process, electronic voting does allow for anonymity, if desired for a particular decision. When votes are cast by telephone, it is important that the chair ask not only for "YES" votes, but also for "NO" votes and "Abstentions". When everyone is physically gathered around the table, it is easy to determine if a vote is less than unanimous. If the board of directors is voting by telephone, they must take the extra step to ensure that every vote is accurately known and recorded. Voting without a meeting Virginia law permits directors to take action without a meeting if the action is taken by ALL members of the board. Va. Code Ann. § 13.1-865. The rationale for this is clear: since collective discussion is not possible without a meeting, it is not in the best interest of the organization to have only some of the directors making a decision independently, without such discussion. In the absence of debate, unanimity is essential. Virginia law also stipulates that voting by the board without a meeting must be recorded by "written consent" – in other words, there has to be clear and specific written documentation that ALL board members participated in the decision and agreed with the action taken. Written consent is defined as a document that states the action taken, is signed by each director either before or after the action is taken, and is included in the official board minutes or filed with the corporate records reflecting the action taken. Thus, a unanimous written consent has the same effect as a vote taken at a meeting. When might a written consent be used by a board of directors? One example is the approval of a new director. The board development committee could distribute its recommendation for a new board member, along with biographical information, to all current directors. This material would include a consent form approving the appointment of the new board member and a signature line; current directors would then each sign his or her form and return it by fax to the organization or the secretary. Voting by unanimous written consent in lieu of a meeting is only appropriate if there is a high degree of consensus and no controversy is expected, as it allows for only a "YES" vote. It can also be more time-consuming, requiring follow up with individuals who do not respond. Remember: ALL board members must sign the written consent. Action taken without a meeting does not become effective until the last director signs the consent, unless the consent specifies a different effective date, in which event the action taken is effective as of the date specified therein, provided the consent states the date of execution by each director. Using e-mail Based on the three legal principles described above, it is easy to understand why the simple action of sending out a motion by e-mail, and collecting reply e-mail votes, does not constitute a meeting by a board of directors. It is clear that this method does not constitute a board "meeting" in which all members can hear each other and discuss the issue before taking action. However, voting by written consent may be accomplished by the use of "electronic transmission" as defined in Va. Code Ann. § 13.1-803. This means that the consent form could be e-mailed to all directors, and returned with their signature via e-mail. Va. Code Ann. §§ 13.1-803 and 13.1-865. But again: as discussed above, ALL directors must sign the action. Another potential use of e-mail to expedite board action might be to gain consensus via e-mail communication and then have the full board ratify the decision at its next meeting. Sample bylaw wording When drafting or updating organizational bylaws, it is recommended that each of these aspects of voting be addressed separately with clear and easily understood language. The following examples may be helpful: Meeting Notice. Unless otherwise stated in these bylaws, notice of any Board meeting must be given in writing and mailed to all directors at least five days before the date of the meeting. Notice of a meeting may also be given by telephone, fax or e-mail at least two days before the meeting. Telephonic Meetings. The Board of Directors may permit any or all directors to participate in a regular or special meeting by any means of conference telephone or other communications equipment which allows all those participating to hear each other at the same time. A director participating in a meeting by conference telephone or other communications equipment which allows all those participating to hear each other at the same time is considered to be present in person at the meeting, and shall be counted toward the required quorum. Voting at Meetings. Votes may be cast at regular or special Board meetings by voice, by a show of hands, or by written ballot. A vote may also be cast by telephone, electronic mail, facsimile or another electronic transmission if the voting director is participating in a meeting by conference telephone or other communications equipment which allows all those participating to hear each other at the same time. For purposes hereof, a written consent and the signing thereof may be accomplished by one or more electronic transmission. Action Without Meeting. The Board of Directors may take action without a meeting if the action is taken by all members of the Board. The action shall be documented by one or more written consents stating the action taken, signed by each director either before or after the action is taken, and included with all other board minutes or filed with the corporate records reflecting the action taken. Action taken under this section shall be effective when the last director signs the consent unless the consent specifies a different effective date, and states the date of execution by each director. Action taken by written consent shall have the same effect as a vote taken at a meeting of the Board.
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