Email has brought much simplicity and speed to communications. Many of us are doing much, if not all, of our correspondence by email. Easy and fast, email permits directors of for-profit and not-for-profit corporations alike to conduct business in an efficient manner between meetings. Or does it? Be aware that even in this age of electronic everything, directors of North Carolina corporations still may take action in only one of two ways: at a meeting or by unanimous written consent. Although technology and email may simplify these ways of acting, they cannot shortcut them.
Many of us who serve on nonprofit boards have received emails, soliciting our vote on some urgent matter that must be dealt with before the next regularly scheduled meeting. If a majority of the board members reply affirmatively to the issue, it is considered passed. Unfortunately, many of those “votes” are not valid.
The North Carolina Business Corporation Act and Nonprofit Corporation Act are designed to encourage discussion and the free exchange of ideas among directors. Remember the classic Sidney Lumet film, 12 Angry Men? In that film, a single dissenting juror slowly managed to convince the other 11 jurors not to convict a man tried for murder. The statutes recognize the value of robust debate and interchange. Directors may meet together in a single physical location or by a means of communication that permits all the participating directors to simultaneously hear each other. Directors who participate in a meeting with such a means of communication — whether by telephone conference or Skype or similar technology — are considered to be present in person at the meeting.
The need for a meeting and interchange is not necessary when all the directors are of like mind on an issue. Hence, directors may take action on the issue by unanimous written consent. Unanimous means unanimous. All directors must sign the consent action.
So, is there a place for email in director actions? Yes. If the corporation’s articles or bylaws or an action of the board of directors permits it, a director’s consent to action taken without a meeting may be in electronic form and delivered by electronic means. If all the directors agree with the action, email responses from each director can operate as the written consent. The motion or action should be clearly stated and the email responses should unambiguously agree to the action. The motion or action may be an attachment to the email, which each director may print, sign and return. The email responses should be maintained with the corporation’s board minutes.
The next time you as a board member are asked to vote by email, remember the defendant whose life hung in the balance in 12 Angry Men and the lone persistent and persuasive juror. Make certain that your board fulfills its statutory responsibilities and acts unanimously. If not all directors favor or consent to the action, hold a meeting to address it. Each director may hear and consider the views of the other directors and the majority of them may act to approve the matter.
–Melanie S. Tuttle
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