Exploiting the Proxies For BOD Election

North Carolina General Statute Section 47C-3-108, Meetings, requires in section (a):
Not less than 10 nor more than 60 days in advance of any meeting, the secretary or other officer specified in the bylaws shall cause notice to be hand-delivered or sent...The notice of any meeting must state the time and place of the meeting and the items on the agenda...

§ 55A-7-20. Members' list for meeting.(a) After fixing a record date for a notice of a meeting, a corporation shall prepare an
alphabetical list of the names of all its members who are entitled to notice of the meeting. The list shall show the address and number of votes each member is entitled to cast at the meeting
(a) After fixing a record date for a notice of a meeting, a corporation shall prepare an alphabetical list of the names of all its members who are entitled to notice of the meeting. The list shall show the address and number of votes each member is entitled to cast at the meeting

From 2015 through 2019, the elections for members to the Board of Directors were consistent because there were equal number of candidates for equal number of seats, no nominations from the floor.

So during those 5 years the Notice of Annual Meeting agendas state there will be "Election of Members to The Board" during the annual meeting. Motion from the floor were made and seconded to reelect the candidates by voice vote which yields unanimous votes. The proxy forms are general but limited to only being used during the meeting, almost exclusively for reaching quorum and approving the budget.

This changes in 2020 when there are more candidates than seats.
The advance Notice of Annual Meeting agenda now states there is a "Nomination of Members to the Board of Directors". There are 4 candidates for 3 seats. The minutes of the Annual Meeting clearly state, "***As a reminder, voting will be done via mail in ballot after the meeting." The proxy form, as usual, has a date limitation for use during the meeting only.

In 2021, there are 5 candidates for 4 seats. Notice of Annual Meeting agenda included "Nomination of Members to Board of Directors", no mention of election. The Self-nominating form included in the notice packet stated that there are 4 positions on the BOD up for election "following the Annual Meeting". States this twice. The proxy forms, as usual, date limited. Two days after the Annual Meeting the PM company sends an email to the owners informing them that the 5th candidate has dropped out thus leaving 4 candidates for 4 seats so here's your new board members! There was no vote. It was sloppy of the PM to assume there would be unanimous acclamation so they skipped a few steps and declared the winners.

Things are very different in 2022. There are 5 candidates for 3 seats. I am one of those candidates. Three candidates are BOD officers (pres, VP, and secretary) running for re-election. The Notice of Annual Meeting agenda states "Nomination of Members to Board of Directors", no mention of election. The Self-Nominating Form included in the notice packet states that "The XXXXXX Condominium Association will have three (3) positions on the Board of Directors up for election following the Annual Meeting on Thursday, November 3, 2022". Actually states that twice. The proxy form, as usual, states, "THIS PROXY IS LIMITED TO THE ANNUAL MEETING OF MEMBERS TO BE HELD ON NOVEMBER 3, 2022".

Members in attendance at the remote annual meeting had no idea who the 5 candidates were until that section of the agenda was executed. Candidates were given a chance to say something from the floor, two of us chose to do so. Immediately after my 2 minute speech, the PM CEO initiated a vote for the BOD seats. Happened quickly, votes were tallied, and results announced. All 3 board officers won re election and it was very apparent from the vote totals that proxies had been used to reach the winning totals. And who held all the proxies? The BOD president. In all previous years the proxy forms included the BOD president, by name, as the top option to hold a member's proxy. Had the vote been by mail-in ballot as in prior years when there were more candidates than seats, the BOD president could not have legally used the proxies he held to vote. It appears our association had an election for the BOD during the meeting that the entire association was unaware would be happening because it wasn't on the agenda so the BOD president could exploit the proxies to make sure he and his BOD cronies would be re-elected.

I know that the BOD and PM has never complied with §55A-7-20 which denied candidates access to media that could have been used to campaign and solicit proxies. Reading further in the statute, there is judicial remedy if the organization refuses to comply with §55A-7-20 resulting in the superior court of the county invalidating the election. Now we know that 47C-3-108 was not complied with either.

My approach through this ongoing complexity of issues with the BOD has been to assume laziness, ineptness, ignorance of the BOD. Don't attribute to malice that which can be easily explained by incompetence. How the 2022 election was handled changes my thinking to believe this was intentional. The PM CEO is a credentialed CAM and he clearly knows the law but in this past election it looks as though he and the BOD exploited owner ignorance and apathy to have an election that benefited the president and his pals on the board.

It's an invalid election, imo.

Please read for comprehension. THere was no way I or the other non-board candidate could solicit proxies because the BOD did not comply with the law posting the names and mailing addresses of owners a month before the election. In a coastal resort condo, 90% of the owners do not live in their condos so having their mailing addresses to get those proxies is a necessity. As of today, we have still not heard from the BOD as to whether they will comply with the law next year so it could be epic next year.

Second, the most important point of the post was when the election was held. Informing owners a month prior to the annual meeting that there is going to be "nominations" to the board but no mention of an election on the agenda, and clearly state twice in another document that the vote will occur AFTER the meeting and then defy that entirely and have an election no one knew was going to happen is quite irregular.

And the irony of this is there was a motion made to change the rules to require the BOD to publish minutes of their meetings within 60 days of the meeting, it was duly seconded by another owner only to be told there could be no voting on the motion because it had not been in the agenda announced to owners a month earlier.

"Typically, the default officer named is the secretary or president. However, if the person holding that office is seeking re-election to the Board, a different officer should be named to avoid any appearance of bias or election tampering." Nancy Polomis, partner at Hellmuth&Johnson

"Associations can be rife with fraud where boards keep themselves in with proxies," says James R. McCormick Jr., a partner at Peters & Freedman LLP in Encinitas, Calif., who represents associations.