Proxy solicitation by BOD

Started by IkeW • 5 replies • 1978 views

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IkeW (Texas)
Posts: 11

Posted:

The Board of Directors in our Texas Property Owner Association, recently sent out the official meeting notice, as required by our Bylaws, for our upcoming annual meeting, which appropriately included the assignment of proxy form, allowing property owners this option. However, this year, they included the name of a Board member also as an option for the proxy, should anyone property owner want to assign their proxy to the Board. Several property owners are upset as the BOD spent property owner money to solicit proxies by the Board in the official meeting notice, as it is believed the Board has no more authority over any property owner to solicit proxies. We have reviewed the Texas Statutes and Texas Business rules of conduct and our bylaws, which list guidelines for proxy use, however no where does it state the corporation can interject a Board member as an option to solicit proxies officially from the property owners. We believe this is likely illegal, but at the least, unethical. Does anyone have any advice on how to handle this situation?
Best regards,
IkeW

MaryN (Virginia)
Posts: 125

Posted:

Here in VA..don't know the law, but this is what our BOD does. They send out the form in the regular mailing about an upcoming meeting. Then the phone calls begin. The proxy is almost begged for...it's always vital..for the board to get what they want. The last meeting we attended..they had enough proxies before the meeting began to win any vote. They gleefully pointed out that fact. 12 of us property owners left the meeting, why bother to attend when being there and voting doesn't matter.
MaryN

RogerB (Colorado)
Posts: 5,067

Posted:

Ike, I am aware of Boards and MC which do this and do not consider it proper. Some may only be doing this to assure a quorum which I believe is proper so long as the proxies are not used to gain leverage on votes. Unfortunately, this is probably not the case in most instances.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Ike,
Many times, an important issue that is sent to the ownership for a vote, does not get enough responses back to get approval and some of these items are important to the smooth running of an association. I have seen it done many, many times, where a Proxy with a Board members name on it,will be included for owners to sign their vote power over to that officer of the Board. Usually it is the Secretary and normally a statement on how the Board is suggesting the owners to vote.
Actually, if this Board member is soliciting proxies, unless he signing his name on them, it sure is not illegal.
The appathy of so many owners these days, makes it difficult to get items passed or even to obtain a quorum. Proxies used properly are an effective tool unless they are used during Board elections. That's where associations can get in trouble with it's members and "padding" vote accusations

NancyD1 (Florida)
Posts: 447

Posted:

A proxy does not have to be given to anyone. If the owner/member cannot make the meeting or vote in person he can send in the proxy in his name and vote as he wishes. If you have checked all the required documents and there is no guideline for soliciting proxies, it is legal.

When you get a proxy for a stockholder vote from a stock compsny, don't they solicit the proxy? The proxy's always state that the BOD is soliciting the proxies, that they are not receiving any renumeration for the solicitation.

This, I agree, is not an ethical issue the BOD should take in a HOA.

IkeW (Texas)
Posts: 11

Posted:

Many thanks for all the counsel and advice on this issue. As always, you all are a source of great information. IkeW

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