Quorum Is Required
Quorum Needed for Business. "Unless otherwise provided in the articles or in the bylaws...an act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present is the act of the board. The articles or bylaws may not provide that a lesser vote than a majority of the directors present at a meeting is the act of the board." (Corp. Code § 7211(a)(8))
Quorum Defined. A "quorum" of the board is the minimum number of directors required to be present before the board may conduct business. (RONR (12th ed.) 40:1) "In the absence of a quorum, any business transacted (except for the procedural actions noted in the next paragraph) is null and void." (RONR (12th ed.) 40:6) Unless the articles of incorporation or bylaws state otherwise, "a majority of the number of directors authorized in the bylaws constitutes a quorum of the board for the transaction of business." (Corp. Code § 7211(a)(7)) A vacancy on the board does not change the number of directors needed to make a quorum--the board needs a majority of the number authorized in the bylaws, not a majority of actual directors. For example, if the bylaws call for a board of five directors, the quorum is three. If two directors resign, the quorum requirement for the three remaining directors is still three. If three out of five directors resign, the two remaining directors cannot conduct business because they do not constitute a quorum.
Loss of a Quorum. An act or decision made by a majority of the directors present at a meeting duly held at which a quorum is present is the act of the board. The articles of incorporation or bylaws may not provide that a lesser vote than a majority of the directors present at a meeting is the act of the board. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting, or a greater number required by this division, the articles or the bylaws. (Corp. Code § 7211(a)(8)) For example, a board of five directors needs three to establish a quorum. It then needs two of the three to approve any motion. If one of the three leaves the meeting, business may continue as long as the remaining two directors vote in unison. This can lead to mischief, with only two directors making decisions for the entire board. When this happens, a special meeting may need to be called with all directors present so they can reverse the decisions of the two directors.
Duty to Attend
Directors have a nondelegable duty to attend board meetings. Missing an occasional meeting is not a problem, but habitually missing meetings or refusing to attend is a breach of their fiduciary duties. Under Corporations Code § 7231(a), "A director shall perform the duties of a director . . ." Under the Davis-Stirling Act, directors have a further duty to monitor the association's finances. (Civ. Code § 5500) His failure to attend meetings means he is missing the treasurer's report, not reviewing financial records, and not asking questions about finances--a further breach of his fiduciary duties. A person who consents to being a director and then refuses to participate loses the protections of Civil Code § 5800. As such, the problem director may face personal liability if something happens.
Director Proxies Not Allowed. Board members cannot send someone else in their place to attend board meetings and vote. It does not matter whether they have a signed power of attorney. A director's duty to attend board meetings and vote on board issues is nondelegable, i.e., it cannot be delegated or assigned to others.
Bylaw Amendment. As provided for in Corporations Code § 7151, the membership can (i) prescribe qualifications for directors, including meeting attendance, and (ii) give your board the power to declare vacant the seat of any director who fails to meet those qualifications.
Attendance by Phone. Directors can attend meetings by telephone, provided all directors can hear and participate in discussions. (Corp. Code § 7211(a)(6); Civ. Code § 4090(b)) There is no reason for directors to miss meetings since conference phones are inexpensive--including conference speakers for cell phones.
Filling Empty Seats
If enough seats become vacant (through death, resignation, or disqualification) such that there are not enough directors to meet quorum, the remaining directors can appoint up to three persons to fill the empty seats. There are two exceptions to the power of the remaining directors to appoint replacements:
- The bylaws do not allow for appointments and require that all seats be filled by a special election of the membership or
- The vacancies were caused by the membership's action (a recall) rather than by the death or resignation of directors.
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