Announcement Date: September 28, 2016
K4AC sent the below email to the ARRL Board of Directors.
The voting process currently underway in this matter appears to be illegal under Connecticut law:
“Prohibition on Proxy Voting
In Connecticut, as in most other states, directors may not vote by proxy. The theory behind this prohibition is that the discussion and interchange of ideas that occurs at board meetings is essential to the informed exercise of the directors’ fiduciary duty to the corporation.
An e-mail vote – that is, a proposal circulated and responded to by e-mail – is essentially a proxy vote delivered electronically.
The prohibition on proxy voting by directors has its roots in case law developed over many decades, known as “common law,” and eventually codified in statutes. The law regarding proper board action is substantially the same under the common law and under statutes governing business corporations and nonprofit corporations. In fact, most of the law developed in the business (or stock) corporation arena, but is applicable to nonprofit (or nonstock) organizations. But nonprofit organizations, whose directors are usually uncompensated volunteers, may be particularly prone to allowing their directors to vote by e-mail.
The principal Connecticut case on the issue of proxy voting by directors is a 1956 business corporation case called Greenberg v. Harrison. In Greenberg, the court invalidated the repayment of a loan by a corporation to its lender. The loan was to continue for one year unless earlier repayment was approved by unanimous consent of the directors. Finding that there was no unanimous consent because one director gave a proxy to another director but did not attend the board meeting, the court explained:
The affairs of a corporation are in the hands of its board of directors, whose duty it is to give deliberative control to the corporate business. This requires the physical presence of a director at directors’ meetings, and he cannot act by proxy.” (emphasis added)
Source: Connecticut Association of Nonprofits <http://ctnonprofits.org/ctnonprofits/sites/default/files/fckeditor/file/resources/publications/NPA-articles/NPA0611_EmailVoting.pdf>