Monday, March 1, 2010

Proxy Voting is limited in Colorado for Directors of Nonprofits

Under Section 7-128-205 of the Colorado Revised Statutes, a director of a non-profit, if allowed by the Bylaws, may make a written proxy directing another director to vote a particular way on a particular issue.  If this is done, the director is deemed to be present for purposes of quorum, and the vote is taken according to the direction of the written proxy.  However, the proxy is only good for the specific issues identified in the proxy, and the authority is only to vote as directed by the proxy.  No other proxy voting is allowed by a nonprofit director.

For a corporation, there is no similar statutory provision for directors to vote by proxy.  Accordingly, under the quorum and voting statutes for a corporation, it does not appear that a proxy vote by a director is allowed.

If you’re on a nonprofit board, remember this proxy rule so that the decisions of your board are legitimate and can be documented appropriately.

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