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Directors trading roles & Proxy votes (Texas)

Started by KarenR17 • 9 replies • 357 views

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KarenR17 (Texas)
Posts: 10
Posted:
1. Our Board Directors randomly swap their roles throughout the year. Is this a common thing with HOA Boards, if so, for what purpose?

2. Are Board Directors allowed to vote by proxy a any type of Board meeting? Our Articles of Incorporation and Bylaws only address proxy voting as it relates to voting to elect a director or when a members’ vote is required.

TIA!
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Karen

While you docs might vary:

1. Yes if the BOD calls for a Officer Election. Remember they are the only ones voting for such. That said, most only change every year.

2. Our docs, and I believe most, do not allow BOD Members to vote via Proxy at a BOD Meeting. Yes they can vote via Proxy at the Annual Meeting but generally all BOD Members attend in person.
KarenR17 (Texas)
Posts: 10
Posted:
Thank you, JohnC46!
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By KarenR17 on 10/26/2023 10:39 AM
1. Our Board Directors randomly swap their roles throughout the year. Is this a common thing with HOA Boards, if so, for what purpose?
If you mean that Charlotte served as President for part of the year, and Pete served as director during this time, then Pete and Charlotte, with board majority approval, swapped officer positions, this is completely legal.

I do not think it is common. But I also think it's not a bad idea. The workload on the President's and Treasurer's shoulders is heavy. Swapping officers twice or maybe even three times a year might help even out the distribution of work.

The only complication that is large IMO is when it comes to who is authorized by the bank to sign checks.
Quote:
Posted By KarenR17 on 10/26/2023 10:39 AM

2. Are Board Directors allowed to vote by proxy a any type of Board meeting?
The Texas Nonprofit Corporation statute says yes. However, if a director attends by proxy, then the director's presence (by proxy) may not count towards quorum.

See BO 22.213 and BO 22.214 at https://statutes.capitol.texas.gov/Docs/BO/htm/BO.22.htm

Your HOA is a nonprofit corporation, isn't it? Homeowners' associations usually are, but it is not guaranteed.
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By ElleN on 10/26/2023 2:14 PM
If you mean that Charlotte served as President for part of the year, and Pete served as director during this time,
Post-o. change this to "and Pete served as Treasurer during this time... "
KarenR17 (Texas)
Posts: 10
Posted:
ElleN, Once again, thank you!
RogerJ1 (Texas)
Posts: 550
Posted:
Quote:
Posted By KarenR17 on 10/26/2023 10:39 AM
1. Our Board Directors randomly swap their roles throughout the year. Is this a common thing with HOA Boards, if so, for what purpose?

TIA!

Per Chapter 209 of Texas Property Code, unless your association is under government code, which is not likely, then under Sec. 209.0051. OPEN BOARD MEETINGS., https://statutes.capitol.texas.gov/SOTWDocs/PR/htm/PR.209.htm , they have to elect officers in an open meeting where proper notice, including a general agenda, was given.

If they are electing officers outside of a proper open meeting, you could challenge it in JP court. Although I am not sure what you would gain. Instead, you could tell the board it is taking a risk not doing it properly. It could comeback to haunt them if any litigation were to happen on other issues as it could give D&O insurance a possible out or complicate matters I assume.
KerryL1 (California)
Posts: 14,550
Posted:
And also check your documents to see if they permit directors to vote by proxy at board meetings:

Sec. 22.215. "VOTING IN PERSON OR BY PROXY. A director of a corporation may vote in person or, if authorized by the certificate of formation or bylaws of the corporation, by proxy executed in writing by the director."

Sec. 22.216. "TERM AND REVOCABILITY OF PROXY. (a) A proxy expires three months after the date the proxy is executed...."
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By KerryL1 on 10/27/2023 4:11 PM
And also check your documents to see if they permit directors to vote by proxy at board meetings:

Sec. 22.215. "VOTING IN PERSON OR BY PROXY. A director of a corporation may vote in person or, if authorized by the certificate of formation or bylaws of the corporation, by proxy executed in writing by the director."
Oops; I stand corrected. KarenR17, I agree with Kerry that the bylaws or certificate of formation must authorize voting by proxy.
KarenR17 (Texas)
Posts: 10
Posted:
Thank you so much to all of you for taking your time to reply to my questions! Your feedback is appreciated more than you know!

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