Risks include accidentally granting expanded voting authority or preventing membership participation due to a proxy-quorum
First, a recap:
- A "Limited Proxy" functions like an absentee ballot for a member who cannot attend the meeting. The form restricts the proxy holder's authority by providing specific instructions on how to vote on particular agenda items which must indicate the member's choices (yes/no).
- A "General Proxy" form grants the proxy holder broad discretion to vote on any matters that arise during the meeting, as they see fit, without instructions from the member. It can be used for any voting item at the specified meeting, including amendments or other business. If an agenda item is added after the proxy is sent, the proxy holder can vote that too! Moreover, if the proxy named is a board member, it amplifies their power because they control both the agenda AND your vote.
- "A "Certificate of Appointment of Voting Representative" is essentially an unlimited power of attorney to vote for you. It has specific purposes for homes held by corporations, trusts, etc. Check with an attorney if you think you need it.
- A Membership Quorum is the minimum number (percent) of total voting interests (i.e. member homeowners) required to legally hold a meeting and conduct business at an Annual, Membership or Special members meeting. A membership quorum includes voting interests who are in person, by proxy, or electronically, if allowed. (In contrast, a quorum of board of directors is simply a majority of board members.) A meeting agenda only requires including member participation (Q&A) if a quorum by proxy is not achieved in advance.
How Might Proxies be Misused?*
1. Obtaining Just Enough Proxies to Reach Membership Quorum to avoid disussion
Risk: A meeting can be "valid" on paper, but few homeowners may be present to challenge or even understand what's being voted on. A board only needs to include member participation (Q&A) in the agenda if a quorum and proxy votes are not achieved in advance.
The recent December 30 Ball Janik zoom presentation and Q&A was welcomed. (However, recall that at the August 27 $11M loan authorization, members could not ask questions before the board voted on the authorization as the first agenda item due to a proxy quorum.)
2. Restructuring or adding new agenda items using General Proxies.
Risk: A board could conceivably add 'new business' items and if you have already submitted a General Proxy for them to vote on your behalf, you won't get to weigh in. For example, imagine if the board decided to choose a new vendor, add electronic voting, adopt new policies or make a very large purchase using our proxies, without discussion. Also, if the meeting is not legally adjorned with finality, it could be continued with more opportunities to vote on your behalf.
Risk: The board can vote for your behalf in moments, without a floor vote or ballot or even asking your designee.
Summary - Proxy Voting can be misused to:
Secure a membership quorum without participation,
Control voting outcomes,
Avoid discussion or opposition during meetings,
Extend a General Proxy's use beyond its intended purpose or meeting.
Solutions / Best Practices for Transparent voting
Encourage neighbors to:
Attend meetings in person when possible.
Name a trusted individual (not a generic board member) as your Limited Proxy if needed.
Add voting instructions or limits to the proxy if unclear, and keep a copy for yourself
Avoid signing a General Proxy. (or, revoke a previously-signed one in writing before the meeting.)
Request to view and re-count the proxies at the meeting.
Request that the board and community management use these best practices:
Always provide specifics in the ballot question -- who/what/when/purpose/cost (not vauge generalizations) -- in advance of the meeting/vote.
Announce how many proxies were collected at the meeting and publish in the meeting minutes,
Disclose who holds the proxies, and
Separate Limited proxies from those authorizing full voting power (General Proxies), or uncommon quorum-only proxies.
Do not continue meetings on following days to keep zombie proxies in effect. Ensure full meeting closure by "Adjorning sine die" (legal term)
Remember: A limited proxy only authorizes the proxyholder to vote on specific issues. This prevents a board from making unexpected decisions using someone else’s vote.
Retrospective: How has proxy use changed at Medley this year?
Keep in mind that before the change in Medley's management company and HOA attorney, Medley had annual meetings in person and online, with discussion of all items which were mailed to us weeks in advance. There was an official private, paper ballot for director elections or other important decisions. A separate Limited Proxy form was provided and only needed in the case the homeowner could not attend. Broad General Proxies were not used. Ballots/proxies were counted publicly by the homeowners on site.
We homeowners have tools to reverse this year's trend to return to transparency through education, advocating for ourselves and organizing with others. It begins with fully understanding the types and not just uses, but risks, of proxies. (We've been posting on this topic since October.)