The COVID-19 pandemic catapulted the new normal of virtual meetings into our day-to-day lives.
In order to adapt to this new normal, nonprofit corporations are turning to their Board of Directors for leadership and direction. Yet, at a time when virtual meetings are more commonplace, directors must ensure that any virtual meetings are compliant with their nonprofit corporation's governing documents and North Carolina law.
Under the North Carolina Nonprofit Corporation Act, unless a nonprofit corporation's articles of incorporation or bylaws provide otherwise, a board of directors may permit any or all directors to participate in a meeting through any means of communication by which all participating directors may simultaneously hear each other during the meeting. Each director who attends a meeting through such means of communication is deemed to be present. N.C. Gen. Stat. 55A-8-20. For example, as long as your nonprofit corporation's governing documents do not forbid the use of teleconferencing or video conferencing and such platforms allow all directors to hear each other simultaneously, holding a virtual meeting through such means is permissible.
In addition, unless a nonprofit corporation's articles of incorporation or bylaws provide otherwise, a board of directors may take action without meeting if the action is unanimous and evidenced by a written consent signed by each director describing the action taken and included in the corporate records. Furthermore, Session Law 2021 House Bill 320 authorized directors to give their consent electronically without the express consent of the corporation. Therefore, if a board of directors wants to take action solely by electronic mail, it may do so in electronic form and delivered through electronic means. N.C. Gen. Stat. 55A-8-21(a) (citing 55A-1-70).
In essence, if the nonprofit corporation's articles of incorporation or bylaws prohibit the board of directors from participating in a meeting through alternative means of communication, then the board is limited in what it can do. Any action taken by a board of directors in violation of the articles of incorporation or bylaws could be voided. In other words, cutting corners now for the sake of getting things done may leave these actions vulnerable to challenges later down the road.
Now is the time for nonprofit corporations to review their articles of incorporation and bylaws to ensure that there are no restrictions on the board of directors from meeting through alternative means of communication. The post-COVID-19 era of virtual meetings is likely here to stay, and a board of directors can still take action now as long as it follows the nonprofit corporation's governing documents and North Carolina law.
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This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.