The ins and outs of board elections.

• Author: Broder, Peter

One of the more murky areas of charity and not-for-profit law is the issue of the proper conduct of board elections. Many of the older pieces of legislation that deal with constituting and operating nonshare capital corporations--the typical structure adopted by charities and not-for-profit groups -provide little guidance on the process for such elections.

The current Alberta Societies Act is typical in this regard. The statute itself, though it has almost nothing to say on the subject, mandates that the bylaws of groups seeking incorporation as a Society must set out provisions on "the appointment and removal of directors and officers and their duties, powers and remuneration" as well as provisions on the holding of general meetings of members, the rights of members and how members are admitted, withdraw or, if applicable, can be expelled.

A Society is free to include as much detail about elections and other governance processes as it likes in its bylaws, but many choose to provide minimal direction beyond fulfilling the basic requirements under the statute. The standard bylaws available on Service Alberta's website also provide limited specifics. The merit of this is that organizations are afforded lots of flexibility in how they operate, and are not subject to a 'one-size-fits-all' approach.

However, this flexibility also means that elections may be conducted on a 'because that is the way we have always done it' model. In the average organization this may leave unanswered questions like:

* at what stage in the member application process does someone attain voting rights?;

* what rights do members have to member lists and other corporate records (for example, for purposes of presenting a motion at a General Meeting)?; and

* if candidates for directorships are identified and/or vetted through a Nominations Committee, can the general membership nonetheless nominate other candidates from the floor of a general meeting?

The mechanics of nominations recently became an issue in a large Canadian co-op retailer, which sought to implement a vetting process to ensure nominees for its board had expertise in its core business. Though not structured as a charity or not-for-profit organization, that corporation's initiative mirrors the approach of many voluntary sector groups that seek to keep a tight rein on who can stand for election as a potential director.

For sector groups, to some extent the lack of guidance on questions around these processes...