With the near universal use of email, texting, Twitter, and instant messaging, small corporations and homeowner associations frequently try to use these services for the business of the company. While this practice can be valuable and efficient to manage a company or planned community, it normally cannot be used to exercise the powers and authority of a board of directors.
The way a board of directors makes decisions on the direction of a company or planned community, is by voting and taking action at a meeting of the board. Any “decision” reached by an email or text chain is essentially an action by a board without a meeting. The only way any such decision is reached without a meeting is for all the directors entitled to vote to consent in writing to conducting the business by such an email chain or otherwise without a meeting. Even if a majority of directors want to conduct a meeting this way and a majority want to pass whatever motion is under consideration, it is not valid. Practically therefore, it is usually far easier to call a special meeting and make a decision by vote of the directors who attend (assuming they have enough for a quorum), than to round up written consents from 100% of all the directors.
Some meetings can be held by telephone conference call or video conference. North Carolina law allows the board of directors to permit directors to participate in a board meeting electronically and not physically present, as long as all directors participating can simultaneously hear each other during the meeting. While the law is silent on membership meetings (as opposed to board of directors meetings) Roberts Rules of Order allows electronic attendance for membership meetings if it is included in the bylaws, again with the simultaneous requirement.
-Bradley A. Coxe is a practicing attorney in Wilmington, NC who practices in Personal Injury, Car Accidents, Medical Malpractice, Contract and Real Estate disputes, and all forms of Civil Litigation. Please contact him at (910) 772-1678.