Occasionally when reviewing bylaws for a nonprofit client, I run across a clause allowing proxy votes. For those unfamiliar: in some organizations with members, one voting member can give another voting member the right to cast their vote on their behalf. For example, in my homeowner’s association, I can sign a document that allows my neighbor to vote on my behalf during the annual membership meeting – to serve as my “proxy”. I can instruct that neighbor to vote a particular way – for or against a new covenant, or yes or no on an advisory vote to the board about an increase in our annual assessment. Those issues are usually on the agenda for that meeting, and I can make up my mind before the meeting based on the information provided. By giving my proxy to my trusted neighbor, my vote is still registered even if I am unable to attend the meeting.
This is a tempting workaround for some governing boards who might struggle with making quorum, or who have “snow birds” on the board who are gone for months at a time. If I can collect proxies from two or three board members, I can act as a one-person voting “bloc” and we can still get business done. For boards of directors, though, the consideration is different than a member corporation.
I highly discourage governing boards from allowing proxy voting for these reasons:
First, the practice of effective governance requires presence and engagement with the discussion. Meetings are a venue for all decision makers to hear each other’s perspectives, to be open to having your mind changed, and have the opportunity to change the minds of others. I might come into a board meeting thinking I know how I will vote, but in the course of the discussion, new information comes up that changes my mind. Or the insights of another board member about the downsides of a particular course of action shifts my perspective, and I end up voting differently because I engaged in the discussion with my fellow board members. You can’t do that if you’re not present, and someone given your proxy with instructions may feel obligated to vote the way you told them to without the benefits of that discussion.
Second, think about this situation: imagine a seven-person board is having a meeting next week, I gather proxies from two members (so I have three votes to exercise) and another board member collects proxies from 3 board members (giving them four votes). Between us, all board members are represented, but only two members are actually present at the meeting with a quorum established by using proxy votes. Think of what we could do with only two members present! We could make and pass all kinds of fun motions. Is that okay? Are you comfortable with that? I wouldn’t be. I’d rather have a meeting on Zoom and get a quorum of real live members engaging in the practice of good governance – through careful deliberations over motions made, assessment of risks and liabilities, and other things effective boards consider. Again, governance asks us to engage with the information presented and the perspectives shared by the board members.
Lasty, the Montana Bar Association doesn’t think it’s a good idea. Read their guidance here, as posted on the Montana Nonprofit Association website. While not prohibited in Montana law, they also discourage the practice: “By granting a proxy to another person, it is impossible for the director to meet these duties of care to the organization, and may expose the organization to claims that the individual voting the proxy did not have the facts necessary to make an informed and prudent decision.”
While tempting for its convenience, proxy voting on boards is not good for governance.