New Action Without Meeting Requirements in Effect
On May 14, 2009, Governor Ritter signed into law House Bill 09-1248 (HB 1248) which amends the Revised Colorado Nonprofit Corporation Act (Nonprofit Corporation Act) and addresses in Section 20 the ability and procedures that boards of associations must follow when taking action outside of a board meeting. However, if the bylaws of your association address whether your board is permitted to act outside of a meeting and the procedures for doing so, the provisions of your bylaws will control and the Nonprofit Corporation Act does not apply. Section 20 of HB 1248 provides that boards may take action outside of a meeting if the following requirements are met:
- Notice of the action to be taken must be transmitted in writing to each director on the board. In this day in age, many of us make the assumption this means the notice may be sent via email. That mode of communication works if all directors are set up to receive email. If this isn't the case, the remaining directors must receive the written notice in some other way. This may require faxing or hand-delivering the written notice to those individuals.
- The written notice of the action to be taken must contain the following information:
a. The action to be taken;
b. The time (date and time) by which a director must respond to the written notice;
c. That failure by a director to respond, by the time stated in the notice, will have the same effect as abstaining in writing or failing to demand in writing that the action be taken at a meeting. Click here to view a sample notice.
- By the time stated in the written notice, each Director may:
a. Vote in writing for the action;
b. Vote in writing against the action;
c. Fail to respond or vote; or
d. Demand in writing that the action be taken at a meeting. If a director makes this demand in a timely manner, the action without a meeting is no longer a valid course of action and the board must take action on the matter at an actual meeting.
- Once the time has elapsed in the written notice - and assuming no written demand from a director is received requiring that the action be taken at a meeting - the action of the board is deemed effective if the number of affirmative votes required in the bylaws for the board to act at a meeting are received. In other words, if your bylaws require a majority of affirmative votes at a meeting to pass a motion - that same number of affirmative written votes would be required for an action without meeting to become effective.
The tenets of good governance and transparency dictate that boards should utilize action without meeting in a judicious manner. We also recommend that any such action taken be placed on the agenda to be ratified at the next meeting of the board.