Sometimes things do not go as well as they could in the board room. Let’s look at the situation where a management proposal is defeated by the board. Management deems it critical the proposal be passed. Perhaps it could be a bonus or salary issue. What happens then?
Lets focus on the parliamentary aspects of this event. Most not-for-profit boards operate under Robert’s Rules of Order (RRO). This is a somewhat unfortunate situation, but more on that in another post. RRO offers several options:
- A Motion to Reconsider. This must be made at the same session (more about this later) and by a member of the majority group. The intent here is very clear. This rule prevents the majority from being harassed by frivolous motions on the same subject. You do not want the meeting to bog down into senseless voting if slightly different motions asking the same thing are continuously brought forth until the minority convinces the majority to change its mind. Also, some directors may need to leave the meeting early. This somewhat underhanded strategy calls for the minority to wait until directors voting in the majority leave the meeting. The minority could then reintroduce the motion and ask for a vote again. The rules for the motion to reconsider protect the rights of the majority by preventing such maneuvers.
- A Motion to Rescind. This motion can be done in two separate ways. The first is to provide notice to the board management intends to bring this issue up for a vote again. Board members are entitled to notice of meeting, so you are effectively telling the entire Board the proposal defeated at the last session will be brought back again for a vote. The second method is to bring the motion up from the floor during the meeting without notice. This process is a little more complicated. If a motion to rescind is made from the floor without previous notice, the vote to overturn the last action of the board must have a supermajority. This supermajority can either be: (a) a majority of the entire board, and not just the quorum, and (b) two-thirds of the quorum following the usual rules for voting. Again, the intent is clear. The super-majority requirements prevent the board from rehashing the same material over and over again.
There are several practical considerations the majority must be aware of:
- On a small board, there may not be much of a difference between a supermajority and a majority. For instance, on a ten person board, the quorum is six. Two-thirds of the quorum is four, sufficient to pass the supermajority rule but less than the total number of directors who rejected the initial proposal. Again, this may strike some as being somewhat less than politically expedient, given six members have already said no to the motion.
- The definition of a session can be tricky. A meeting is a generally thought of as a subset of a session. So for instance, a session of Congress roughly equates to one year. When there are quarterly meetings, a meeting is generally thought to be one session. When the board meets more than monthly, a gray area exists. The larger number of meetings need to be grouped into sessions at that point.
- One session of directors can’t tie the hands of future sessions of the board. The bylaws or the articles of incorporation need to be amended to do that. So, a proposal defeated during one session of the board can be brought up again during future board sessions.
At the end of the day, parliamentary wrangling is extremely unproductive. It is hard to imagine a circumstance where management can’t accommodate the concerns of the board. If this can’t be done, then more drastic measures may be called for.