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Michael S. Little: E-mail is helpful, but there are rules to follow

Know when and where you can use it

Posted: January 15, 2009 9:16 p.m.
Updated: January 16, 2009 4:55 a.m.
 
In today's world, e-mail has become the preferred method of communication, not only between friends and family, but also between businesspeople, educators, administrators, lawyers and other professionals.

E-mail is convenient, cost-effective and instantaneous. For these reasons, business professionals often opt to send an e-mail rather than to communicate telephonically or in-person. Therefore, it comes as no surprise that various HOA and nonprofit boards (which are often comprised of business professionals in their respective communities) commonly meet, present association issues, deliberate and vote by e-mail.

Traditionally, states require boards to meet and vote in-person to ensure that board members actively engage in face-to-face deliberations before a board action is taken. This led many nonprofit corporations to ask whether the aforementioned board meetings and votes conducted by e-mail, rather than in-person, are proper.

For California nonprofit corporations and associations, the short answer is that it is not improper for boards to meet and vote by e-mail. However, boards must adhere to specific requirements when meeting and voting by e-mail or they run the risk that their actions will be deemed invalid.

Through California's Nonprofit Corporations Law, the California Legislature expanded the meaning of what constitutes participation and deliberation at board meetings after considering society's increasing reliance upon e-mail, message board postings and other more advanced forms of electronic communication.
Currently, boards can meet and vote by e-mail concerning issues that were not discussed face-to-face in a boardroom.

To do so, nonprofit corporations should ensure that the following requirements are met:
 
* All board members must provide prior written consent to the use of e-mail as a means of transmission for communications, notices and to hold board meetings. Each board member should be made aware that their consent may be revoked at any time. In the event any participating board member revokes their consent, the board cannot proceed to meet or vote by e-mail. Instead, the board meeting must be conducted in-person, via telephonic conference call or by video conferencing. To avoid this consequence and to ensure that all board actions taken after a vote by e-mail are valid, the board should confirm that all members participating by e-mail have not revoked their consent prior to conducting any meeting.

* The nonprofit corporation must take reasonable measures to verify that all communications, votes, comments and objections received by board members in e-mail form were actually sent by that particular board member. Although the relevant California statutes and codes do not define what "reasonable measures" must be taken, the nonprofit corporation should err on the side of caution and maintain executed written records on file for each board member verifying their valid e-mail address.

*  Board meetings conducted by e-mail must be done such that, technologically speaking, each member participating in the meeting can communicate with all other members at the same time.

*  Board meetings conducted by e-mail must allow each participating member the ability to participate in all facets of the meeting, including the ability to propose ideas or to interpose objections to a specific action taken.

*  The applicable provisions of California's Nonprofit Corporations Law seek to ensure that board meetings and votes conducted by e-mail mirror the fully interactive nature of face-to-face meetings. As a general rule, board meetings and votes conducted by e-mail should replicate the procedures used for "traditional" in-person deliberations and discussions. For example, it is a good practice for nonprofit corporations to require all "speakers" to state their full name in the body of every e-mail communication and vote since e-mail addresses do not always clearly identify who is making the comment or objection. Electronic signatures can also be used in e-mail communications to confirm the identity of the board member submitting a comment or vote.

*  Nonprofit corporations must also ensure that all communications, notices and votes set forth in e-mail form are capable of retention and retrieval in a tangible form. This can be accomplished by maintaining hard copies (or electronic copies capable of being printed) of all e-mail notices, communications and votes.
California is at the forefront of emerging rules and legislation concerning the governance of nonprofit corporations that recognize the value and convenience of high-tech modes of communication. In turn, California nonprofit corporations are free to take advantage of e-mail communication as a convenient, cost-effective means to conduct board meetings, so long as the degree of active discussion and deliberation traditionally associated with board meetings is maintained.

Michael Little is an attorney with Poole & Shaffery, LLP, a full service business, corporate and employment law firm. His column represents his own views and not necessarily those of The Signal. "It's The Law" appears Fridays and rotates between members of the Santa Clarita Valley Bar Association.

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