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Can you legally have a meeting of the board of directors with only one member in attendance? Apparently, the answer is yes if he or she holds enough proxies to reach a quorum. The odd result, particularly in these days of close attention to non-profit governance, is that a single director can sit alone in a room and call it a duly constituted meeting of the full board.

No one agrees this is a good result. And I doubt it happens very often--if at all--particularly in larger, well-established non-profits. But this curious gap in the law highlights the odd interrelationship between the rules governing meeting quorums and proxies.

If an organization's articles or bylaws do not expressly state the minimum number of directors who must be present for a meeting, then the state non-profit incorporation statute will. For example, the District of Columbia sets the minimum quorum at one-third of the directors, which is the rule generally, even as most organizations set a higher requirement of a majority. The general rule also allows directors to attend by telephone or by video conference so long as "all persons participating in the meeting are able to hear one another" (D.C. law). So it's clear that a single director sitting alone in the organization's boardroom could hold a meeting if everybody else is on the phone with him or her. Other than the loss of in-person interactions such meetings entail, they don't raise any legal or governance concerns.

Even as statutes are pretty specific about quorum requirements, they fall silent about whether you can count a proxy toward attendance at a meeting. Yet, many organizations' bylaws permit such use, leading to the theoretical possibility of the single director meeting. This is odd because the old common law banned proxies for both for-profits and non-profits because they were seen as an unlawful delegation of a director's duty. But the pressures of a mobile and modern society won out, lest it become too difficult for organizations to conduct business, particularly when experience showed no real harm was done.

Another odd legal wrinkle is that there is clear case law on whether members, as contrasted with directors, can use a proxy to count toward the quorum of a meeting. The answer is yes, although there is the additional common law requirement that no such meeting is valid unless at least two members are physically present. Thus, a thousand member organization can have a legal meeting with only two members in the room as long as the duo holds enough proxies to reach a quorum. And, with less legal clarity, a board of 30 directors can have a properly constituted meeting with only one director in the room so long as he or she has a purse full of proxies.

One would hope that the law of proxies would fill the gap by at least being specific about how a proxy is given and, ideally, limited. Such rules would at least allow the absent director some control over how his or her proxy is used. No such luck. Many states require voting proxies be in writing, but they aren't specific about whether they must contain any limits on their use, such as for a 'nay' vote on a particular issue. That means many other states have no such rules, which necessarily means proxies can be oral. This can lead to much mischief and liability, as the ghost of Sarbanes-Oxley haunts the non-profit sector.

It just may be that as the forces behind non-profit governance reform become uppermost in the minds of directors, this so-far largely theoretical gap in the law will become less theoretical. Perhaps the reformers will move to eliminate even the theoretical possibility of a one-person board meeting.


Bruce Collins is the corporate vice president and general counsel of C-SPAN.


Bruce D. Collins

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