ARS10-708/Virtual Attendance:Solution Re: Problematic Lack of Quorum at Annual or Special Meetings?

2015 Arizona Revised Statutes
Title 10 - Corporations and Associations
§ 10-708 Participation in shareholders' meeting
Universal Citation: AZ Rev Stat § 10-708 (2015)
10-708. Participation in shareholders' meeting

Unless the articles of incorporation or bylaws provide otherwise, the board of directors may permit any or all shareholders to participate in an annual or special shareholders' meeting by or conduct the meeting through use of any means of communication by which all shareholders participating may simultaneously hear each other during the meeting. If the board of directors in its sole discretion elects to permit participation by such means of communication, the notice of the meeting shall specify how a shareholder may participate in the meeting by such means of communication. The participation may be limited by the board of directors in its sole discretion to specified locations or means of communications. A shareholder participating in a meeting by this means is deemed to be present in person at the meeting.
__________________________________________________________________________

The Board of Directors would have to agree to implement virtual participation. I see no reason that they should not agree to do this. This accommodation would solve a goodly portion of the desire to generate an increase in member participation.

 

Respectfully, I believe this is the incorrect Statute as it pertains to corporations with stockholders. The correct statute is ARS 10-3820 which states:

10-3820. Regular and special meetings

A. If the time and place of a directors' meeting is fixed by the bylaws or the board of directors, the meeting is a regular meeting. All other meetings are special meetings.

B. A board of directors may hold regular or special meetings in or out of this state.

C. Unless the articles of incorporation or bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by or conduct the meeting through the use of any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.

The bylaws do allow for electronic participation in meetings. See Article V, Section 5, which states:

"Directors can attend all duly called regular Governing Board Meetings, Informational Meetings and Special Sessions of the Board either in person, by telephone conference call, video conferencing or other communication methods by which all participants can hear and talk to each other."

 

Thanks for the thoughtful responses and clarifications. Great details. Since we are a Title 10 corporation, this was the statute that I was attempting to research……unless one is an attorney, this stuff takes you down rabbit holes that you did not know existed!……in any event, I think that it would behoove the Board to make every effort to expand participation in our meetings. It is tragic when meetings are called and when they fall short of a member quorum. Such a wasted opportunity for our community.

 

As someone who never knows when a bad day will hit, I would absolutely attend meetings virtually if possible.

 

My concern with the RCSC allowing electronic meetings is that the bylaw simply makes a blanket statement and includes no additional rules.

There needs to be rules on how do you determine if you have a quorum, how do you get permission to speak or make motions, how many meetings can you attend remotely...all of them? And what steps are taken if there are technical problems during the meeting?

Just things that should have been included when they amended that bylaw.

They don't seem to think things thru. Just knee-jerk reactions!

 

I wonder why we are so far behind Sun City West. I am sure they have their drama too but has anyone bothered to look at their website? Or maybe talk to someone about things going well and things going badly? Or any other Sun City across the country? Or do our directors know everything already? Here is a link to SCW meeting info and how to remote in. Might want to check thru the tabs for more info. Click on meetings then the April 25 meeting. I believe I posted this before. https://go.boarddocs.com/az/rcscw/Board.nsf/Public

 

The bylaws that are quoted here only allow Directors, not Members, to participate electronically.

 

Seems to me that perhaps then, the permission to conduct electronic meetings is located in the wrong place within the bylaws.

If the bylaws correctly had a separate Article on "Electronic Meetings" along with all the additional rules and guidelines rather than placing that allowance in Article V, Board of Directors, there apparently wouldn't be a problem, which means those standing committee meetings that currently allow members to Zoom in are in violation of the bylaws.

9:35 Electronic Meetings in Committees. As in the case of a board or any assembly, committees that are expressly established by the bylaws can hold a valid electronic meeting only if authorized in the bylaws to do so. A committee that is not expressly established by the bylaws, however, may instead be authorized to hold electronic meetings by a standing rule of the parent body or organization, by the motion establishing the particular committee, or by instructions included in a motion referring an individual matter to the committee or issued subsequent to such a motion. (RONR 12th Ed. 9:35)

 

I have seen several posts here where people mention bylaws being violated and nothing is done about. I am guessing they are a set of guidelines or "rules" that don't have to be followed in 501c4's?

 

Morning Josie,
IMHO, it's not the complete fault of the Board. (I was there so I can attest.) Unless one has memorized the bylaws, articles and policies, it is impossible to know all the "rules." Bringing these issues to the Board via an email or an Exchange meeting in a polite manner (not accusatory) might help the Board to see that they need a little assistance: whether it be by a person hired to be a parliamentarian at the formal Board meetings each month; by a Governance review by an independent party; by making a concerted effort to sit down, work together, and work on them all at once; by appointing another Ad Hoc committee with Members who have no personal agenda to bring to the table. We've seen lots of piece-mealing over the years that has caused a lot of consternation. I can state that it's very hard to know all the facts.
Thank you for your interest.
Jean Totten as One Day at a Time

 

Thank you Jean. I had already found the answer to my question. Did find out that it can be devastating to the corporation, but not the individual violating them. It has to be extremely difficult to get a group of volunteers to devote so much time and energy to be a board member. It's a thankless job. Plus, they serve on all the committees as well. I have said this before, maybe committees should not have board members serve. Maybe there could be snow birds on some committees. Many hands make the workload light.

https://www.501c3.org/nonprofit-byl... board to,should be taken extremely seriously.

 

Cynthia, Thanks for bringing up a good subject in a very thoughtful manner. My observation is getting a 500-member quorum at a membership meeting is difficult unless there is a hot button issue like closing the libraries. Once a quorum is established the members can vote on proposed changes to the bylaws that have been properly noticed. Anything else that is voted upon is treated as a recommendation to the Board and does not have to be accepted by the Board. Members can attend by giving a proxy to another member who attends the meeting. This is my understanding of the bylaws and in no way is it a legal opinion. I will admit I feel the bylaws are a mess.

 

And I still think this is a bunch of crap that you can't bring up new business and vote on it. This is the business meeting of the Members and any new issues that are presented that are not in the form of a bylaw amendment should be allowed on the floor, and allowed to be voted on.

What kind of meeting is a meeting where everything has to be pre-approved or get the blessing from the board? That's not how things are suppose to work. Our Membership meetings are supposed to be OUR deliberative assemblies where we go thru the entire order of business. The way it's set-up now is nothing more than a predetermined script where you get to vote on a few preselected, predetermined issues. Nothing new comes out of a Membership meeting and that's why nobody attends.

Sometimes a pre-selected motion will trigger a new thought but you can't make a motion? What the heck is everybody afraid of?

 

I tend to agree in as much as this should be a member run organization. I think the management/board fear is the money part of it. I have heard many members say they should not have to pay to support the recreation centers if they do not want to. I am not one of them. We get what we pay for.

 

It's the mindset. Focus on one thing. Do not have new thoughts. Brainstorming not allowed. Isn't that how the Hodgepodge thread came about?

 

We should pay to support the rec centers. I just don't like paying extra for the sins of past boards, but we are stuck with it now.

 

The reason we are paying the extra dollars now is because we haven't paid for them the last several years. However we have had opportunities to save or invest that money that we weren't paying to RCSC.

 

$20 million in deferred maintenance? Not buying that, sorry. Some of us here are living SSI check to SSI check. What opportunities are you referring to? We are dealing with insane cost of living, look at gas, eggs, groceries in general. Electricity, car insurance is rising by leaps and bounds. 7.2 million illegals that we know of. Who is paying for their needs. All I have read is for the past 15 years our BOD has screwed up. Not the last couple of years. It reaches a point where "whatever" becomes the mantra, at least for those who try to get involved. My guess is probably 90% of the population just does not care, they want to have fun. I do know everyone on my street feels that way.

 

I would like to see the list of "deferred maintenance projects". They had to know this to come up with the $20M figure.

 

Not one person can answer my questions about this.

From Bill P.:

"It gets even more difficult though and here's why. The RCSC went for years with very small or no increases in the annual lot assessment. It created a mindset that everything was going really good because we didn't need the money and more-so when we found out we had large carry-forward reserves.

Then the reality hit. The former, former GM retired and the new hand-picked guy had his hands full. He knew we were in trouble but refused to tell us how bad it was and why he even needed an increase at all. Once he left, the interim general manager said to hell with it, threw the books open and what we saw wasn't pretty.

The 20 million dollar deferred maintenance sent shock waves through the budget and finance committee. Catching up wasn't going to be easy, nor cheap. We already knew our technology was antiquated and needed a substantial infusion of cash. We knew there were issues on our golf courses. We knew the massive Mountain View remodel would blow up our PIF budgets for years.

All of which caused a major overhaul in how we were doing business. The commitment was to create a 5 year reserve study for all assets owned by the RCSC. Along with that came rewriting the long range PIF plan for the next 10 years (or more). Hopefully released this year."

I have questioned this over and over. Why weren't the books opened before? No one EVER looked at them?? Would they explode?? Because I question things I have been told I hate everyone and everything. I do have the quotes from most of you. These people have never met me, yet they know I hate. It's not even a word I like. If you think my question is stupid tell me and tell me why! Instead I was verbally abused and later just ignored, like I don't exist. Told no one, not one person gives a shit about me! Hell yeah! sign me up to volunteer my time, and in the mean time keep wondering why people do not want to get involved. No, I am not a fan of Sun City any longer. Been here 20+ years. It has deteriorated to the point where I won't see the fruits of my fees, if there even will be any.

Driving around today I was looking at condos on Boswell and Prarie Hills. They look like crap, but by all means put in another pickle ball court. So do the condos in Palmbrook. But buy that building on Grand Ave, South of Grand is a homeless haven, as is the wash behind Safeway in Sun City. Add another Lawn Bowling area. A good use of the condo's on Boswell in the area between them would be perfect for lawn bowling, Nice grassy area.

Oh well, whatever.