Defined. An election proxy is a specific power of attorney that allows one person to act on another person's behalf at membership meetings, e.g., to vote. (Civ. Code § 5130(a)(1); Robert's Rules, 11th ed., p. 428.) Proxies must be signed. The person receiving the proxy is called a proxyholder.
Proxies. Associations are not required to prepare or distribute proxies unless required by their bylaws. (Civ. Code § 5130.)
Who May Serve As Proxy. As required by the Davis-Stirling Act, the proxyholder must be a member of the association. (Civ. Code § 5130(a)(1).)
Proxies Must be Signed. Even though ballots cannot be signed, proxy forms must be signed. The new election law broadens the definition of signatures to include "the placing of the member's name on the proxy (whether by manual signature, typewriting, telegraphic transmission, or otherwise by the member or authorized representative of the member." (Civ. Code § 5130.)
Directed Proxies. Civil Code § 5130(c) requires that “Any instruction given in a proxy issued for an election that directs the manner in which the proxyholder is to cast the vote shall be set forth on a separate page…” (see sample "Cumulative" and "Non-Cumulative" forms). The first page contains the authorizing language giving the proxyholder the power to vote, the second detachable page contains the instructions on how the proxyholder is to vote on each issue. (Civ. Code § 5130(c).) Once a proxyholder registers at the membership meeting, the Inspector of Elections keeps the first page of the proxy. The second detachable page of instructions on how the proxyholder is to vote is given to the proxyholder along with a ballot. The proxyholder then votes the ballot in secret.
Undirected Proxies. Proxies can be undirected, i.e., they do not tell the proxyholder how to vote. Corporations Code § 7613(g) only requires that a proxy “sets forth the general nature of the matter to be voted on” for certain actions (election of directors not being one of those action) but does not require the proxy provide for any instructions. That means an undirected proxy allows the proxyholder to vote on issues at their own discretion. There is no particular form of wording required for a proxy. (Smith v. San Francisco & N.P. Ry. Co. (1897) 115 Cal. 584.) Accordingly, the following language is sufficient to constitute a valid proxy given by one member to another: "I hereby appoint [name of a member] as my proxy to vote on my behalf." The proxy must clearly identify the proxygiver's name and unit or lot address and be signed.
Proxies Assigned to the Board. In elections where members assign undirected or discretionary proxies to the board of directors, the board may vote them as they choose. The board may (i) use them for quorum purposes only, (ii) cast votes evenly between the candidates, or (iii) vote for particular candidates (including themselves if they are candidates). The decision by the board on how to cast votes may be done in executive session. Because the election laws require secret balloting, the board is not required to discuss and decide in open session how it intends to vote their proxies.
Distribution of Proxies. Any form of proxy distributed to 10 or more members of a corporation with 100 or more members must afford an opportunity on the proxy to specify a choice between approval and disapproval of each matter to be acted upon at the meeting for which the proxy is solicited. (Corp. Code § 7514(a).)
Term and Revocation. Proxies automatically expire after 11 months unless revoked or unless stated otherwise in the proxy. The maximum term of any proxy is 3 years from the date of execution. (Corp. Code § 7613(b).) Every proxy continues in full force and effect until revoked. Proxies may be revoked by:
- Written notice from proxy-giver to the Inspector of Election stating that the proxy is revoked,
- Execution of a later-dated proxy delivered to the Inspector of Election prior to the vote,
- The proxygiver's appearance at the meeting requesting a ballot to vote at the meeting and prior to the distribution of a ballot by the Inspector to the proxyholder, or
- The proxygiver sending a ballot to the Inspector of Election which is received by the Inspector prior to the Inspector distributing a ballot to the proxyholder.
Death or Incapacity. A proxy is not revoked by the death or incapacity of the maker unless, before the vote is counted, written notice of such death or incapacity is received by the corporation. (Corp. Code § 7613(c).)
Power of Attorney as Proxy. A "power of attorney" cannot be used in place of an election proxy unless it is a general power of attorney. See "Power of Attorney."
PROXY RULES
Boards should adopt written guidelines to help inspectors of election determine the validity of proxies. Following are sample rules.
1. Proxyholder Must be Present. Proxyholders must be present to vote.
2. Voted as Designated. Proxyholders must vote as indicated on the proxy.
3. Unsigned Proxies. Unsigned proxies are void.
4. Unnamed Proxies. If the proxy does not name anyone as proxyholder, then the person who registers the proxy will be deemed the proxyholder.
5. Undesignated Proxies. Undesignated proxies are those which give no indication how the proxyholder is to vote. The proxyholder will have the right to vote as he or she deems appropriate.
6. Attendance by Owner. If the proxygiver attends the meeting and registers to vote, any proxies submitted on that member's behalf are automatically void.
7. Multiple Proxies. In the event two or more proxies are registered for the same Unit/Lot, the following rules apply:
a. dated proxies will prevail over undated proxies;
b. proxies with the most recent date prevail; and
c. proxies with the same date will be used for quorum purposes only.
8. Alterations. Any alterations to a proxy must be initialed by the proxy-giver, otherwise the altered votes or the entire proxy shall be deemed invalid.
9. Non-Member Signatures. Proxies signed by a renter or any other non-member are void.
10. Miscellaneous. Any issues not addressed by these rules will be decided by the inspectors of election on the night of the annual meeting.
ELIMINATING PROXIES
Because ballots count toward quorum (Civ. Code § 5115(b)), proxies are no longer needed. Unless an association's governing documents state otherwise, boards are not required to send proxies to the membership.Associations may amend their articles and/or bylaws to eliminate proxy voting. (Corp. Code § 7613(a).) Arguments in favor of eliminating proxies include:
1. Fraudulent Signatures. Proxy forms may be signed by using unverifiable signatures. By statute, signatures for proxies now include "typewriting, telegraphic transmission, or otherwise." (Civ. Code § 5130(a)(2).)
2. Fraudulent Voting. The required two-page format for proxies creates the potential for election fraud. Since there is no way to verify that proxyholders vote their ballots according to the owner's instructions, the proxyholder can change an owner's vote.
Recommendation: Since ballots count toward quorum (Civ. Code § 5115(b)), proxies are no longer needed for that purpose. To simplify elections, associations should also consider eliminating cumulative voting and quorum requirements for the election of directors.
How to Simplify Elections
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