New Law for Executive Directors and Nonprofit Boards January 2015
The status quo for an Executive Director to be non-voting member of a nonprofit Board of Directors is changing as of January 2015, according to California law. In the past many nonprofits allowed people to have a seat on their boards without the ability to vote on motions. These positions have been called ex- officio seats.
Who are these people: An ex- officio officer is board member who has not been elected, but has that seat because of another office or position that person holds with the organization: this could be an executive director or founder or former board member, or perhaps a public official such as a mayor or councilperson. As long as this person holds that position or job, they are considered to be a non-voting director member of the board.
The new law is explicit: even if the term ex–officio is applied, that person IS a director and will have voting privileges along with other rights and obligations, unless those privileges are explicitly excluded in the bylaws or articles of incorporation.
- In other words, if you have an ex-officio officer, they will have the right to vote on all matters unless the bylaws or articles of incorporation specifically exclude this right.
- By the same token, if someone is on the board with NO voting rights, they are in fact NOT a considered director on the board.
If you are a California nonprofit, it will be important to reconsider the intent and language used in working with board members who you do not want to have a vote on board matters. Getting rid of the words ‘ex-officio’ and ‘non-voting director’ might be a good start.
Why this matters: be sure that those who you want to be able to vote can do so; and be sure that those who you don’t want to vote are crystal clear that they cannot.You don’t want to give someone the power of being an active voting director via the improper use of a title.
Changing the term for founders, former board members or public officials that sit on the board could be ‘honorary board members with no voting privileges’. That defines with clarity their relationship to your board.
Specific wording that applies to the executive director could include the language “executive directors are welcome to attend and participate in board meetings, with the exception of executive sessions, but shall have no voting privileges”.
There should be no ambiguity to avoid misunderstandings from happening in the boardroom when is it time for a vote.
Gag me, my eyes are glazing over
For sure, this is the kind of thing that can make a passionate visionary nonprofit person begin to shriek. All this language, hair splitting and administrative stuff such as changing the articles or bylaws is not teaching swimming or art, rescuing dogs or rivers, getting new folks to the voting booth or what ever socially important work you are doing. But part of being an effective nonprofit is knowing who gets to make the big decisions. Clarity on who gets a vote is pretty crucial.
A simple solution: as an agenda item for your next board meeting, add updating your definitions for board members and guests. This can be quick and pretty painless. The law is clear: define who can attend, who can vote and who cannot.
Arrrgggh, can you do this for us? Sure, send an email, give a call, and we will be happy to help get this right and right on time for 2015.
image credit: https://cdn.usetopscore.com/uploads/1/media_items/kittens-voting.1000.480.s.jpg