The Importance of Proxies in Community Associations
The vast majority of community associations routinely use proxies in some way at their annual membership meetings. Given that, it’s not surprising that many of the questions I receive from community association Board members and property managers during annual meeting season involve proxies. In order to assist those of our Board member and property manager readers who are in the midst of annual meeting preparation, this blog post will address some of the most common misconceptions and questions concerning proxies and their use.
Understanding Proxies and Ballots
One of the most important things to understand about proxies is that they do not serve the same purpose as ballots. While ballots are voting instruments used to cast a vote, a proxy is a form of power of attorney by which a person who will not be present at a corporation’s meeting (the “proxy-giver”) assigns his or her right to vote at the meeting to another person who will be present at the meeting (the “proxy-holder”). At the annual meeting, the proxy-holder exchanges any proxies he/she holds for a ballot- one ballot per proxy.
Proxy Instructions and Discretion
Unless the proxy document contains language telling the proxy-holder how to cast a vote on behalf of the proxy-giver on a particular matter(s), the proxy-holder has the right to vote on behalf of the proxy-giver in his or her discretion on all matters that may arise at the annual meeting. If the proxy document instructs the proxy-holder to vote in a particular way, then the proxy-holder must cast the vote he/she holds on behalf of the proxy-giver as instructed by the proxy-giver.
Proxy Voting in Community Associations
Unless the association’s Bylaws prohibit or limit proxy voting, the Georgia Non-Profit Corporation Code allows members to vote in person or “by proxy” at all membership meetings. Further, most community association Bylaws allow the quorum count for a meeting to include those members who have appointed a proxy to attend the meeting and vote on his/her behalf. Those members who have appointed a proxy to vote on their behalf are deemed to be “present by proxy” at the meeting. For those of you that do not know, a “quorum” is the number of people who must be present in order to call the meeting to order to conduct business. If there is no quorum, no business, such as voting on election of directors, can be transacted at the meeting. Given the importance of achieving quorum, most community associations send out proxy forms with notices of meetings to encourage members to return a proxy if they do not plan to attend the meeting. This increases the chances that the community association will reach its quorum requirement.
Valid Proxy Forms
In order to be valid, a proxy form must: (1) include the name of the person authorized to act at the meeting (the “proxy-holder”); (2) be signed and dated by the member giving the proxy (the “proxy-giver”) and (3) be delivered to an officer or agent (for example, the property manager) of the association before it is effective. A member can revoke a proxy by attending the meeting in person, by notifying the association in writing that the proxy has been revoked, or by delivering a second proxy to the association. Unless the proxy itself specifies a different termination date, a proxy will expire after eleven months.
For more information on annual meetings and proxies, check out this helpful Annual Meeting Cheat Sheet from NowackHoward, LLC, or this Annual Meeting Checklist.