Annual meeting time is quickly approaching for many community associations throughout North Carolina. A leading cause of confusion during preparation of the notice of annual meeting materials that is sent to the membership in advance of the meeting, is whether to include a proxy appointment form or written ballot. This confusion can lead to proxies and written ballots being used incorrectly and in turn voting being conducted improperly. The manner in which the meeting is being held will dictate whether the members need to be provided a proxy appointment form or written ballot in advance of the meeting date. However, the notice of meeting sent to the membership should never include both a proxy appointment form and a written ballot.
A proxy appointment form should only be included in the notice of meeting materials when voting will be conducted during an in-person or virtual meeting. The members in attendance, in person or by proxy, are allowed to vote. A proxy is someone who votes on behalf of a member that cannot be present at the meeting. A proxy is appointed by the absentee member by signing and submitting a proxy appointment form. The proxy appointment form submitted should identify the person designated as proxy. Proxy forms may be open-ended and allow the proxy to vote in whatever manner they choose on any issues that come up, or the proxy form may be directed meaning that the proxy holder can only vote in a certain manner or for certain directors. All proxies must be recorded and counted to ensure a quorum is present before the meeting starts. If voting is to take place during a virtual meeting, then the association must implement a policy for verifying proxies that are presented from a remote location at the beginning of the virtual meeting.
The North Carolina Nonprofit Corporation Act, which governs most community associations in our State, allows for voting to be conducted without the necessity of a formal meeting setting, by use of written ballots. When a vote is conducted outside of a formal meeting, no proxy should be utilized because no members are casting votes during an in-person or virtual meeting. Therefore, a written ballot and not proxy appointment form should be included in the notice of meeting materials when voting will be conducted by mail or electronically. This is a commonly used method in communities where it can be difficult to get enough members to attend a meeting or for communities choosing to conduct the annual meeting in two parts – virtually and written ballot. The virtual portion of the meeting is solely informational and may include a discussion of certain items of association business, answering questions and concerns, director candidacy statements and the opportunity for additional nominations for director seats. However, the election of directors as well as voting on any other items of association business is conducted at a later date by notice of a meeting by mail and the use of a written ballot that is typically returned electronically or by mail. If the meeting is held by mail outside of a formal setting, then the quorum for voting purposes is established based on the number of written ballots returned as of the deadline given in the notice of meeting, which is considered the “meeting date” for conducting the vote.
In summary, the main points to remember:
- Notice of meeting materials sent to the membership in advance of the meeting date should never include both a written ballot and proxy appointment form – only one or the other.
- The manner in which the meeting is being held determines whether a proxy appointment form or written ballot should be utilized.
- A proxy appointment form should be sent to the membership only if voting is to be conducted at an in-person or virtual meeting.
- A written ballot form should be sent to the membership only if voting is being conducted outside of a formal meeting, by returning ballots by mail/electronically per the deadline in the notice of meeting.
By Mollie C. Cozart