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Observing Nonprofits - December 2003
About The Evergreen State Society
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Professional Query "Can the board of our nonprofit organization conduct business online?"
The short answer is “no,” boards cannot use the Internet for official business. Under current Washington law, face-to-face and conference phone calls (in which “all persons participating in the meeting can hear each other at the same time”) are the only ways a board can conduct official business: set meeting dates, accept reports, adopt resolutions, and the like. It is perfectly ok, of course, to use email and website postings to distribute materials that will be discussed such as drafts of minutes or reports, to circulate reminders of upcoming meetings and other events, and generally to facilitate communications among board members, staff, volunteers and members. It's just that official business cannot be conducted that way. Required notices must be delivered "in writing" (not by email); board discussion and decisions must happen at meetings, not online. Two years ago (in SHB 2301), the for-profit corporations statutes were amended to allow use of electronic communications for some kinds of board business. (The effect of SHB 2301 is described in a document on the Preston Gates and Ellis website.) In the last session of the legislature, the Washington State Bar Association worked for passage of a bill (HB 1098) to institute parallel provisions for nonprofit corporations. The bill did not pass through the complete process by the end of the session. It will be introduced again next year. The proposed nonprofit legislation makes it possible for nonprofits to adopt bylaws permitting electronic transmission for meeting notices, consent forms, ballots for elections of directors by members, and other required documents. The bill specifies that nonprofits cannot use electronic transmission unless the addressee (member or director) has agreed to receive official communications sent in that way. And even when the new law is adopted, discussion or debate, and the adoption of resolutions and other board business, will still have to be done in the traditional ways -- no chat rooms or “round-robin” emails. The proposal also extends the list of the filings that can be made electronically with the Secretary of State’s office. It is probably not surprising that even this limited change turns out to be technically quite complicated to make. The definition “electronic transmission” and the specification of the various kinds of communication that would be allowed require care and precision. The full text of last session’s bill, and its legislative history, can be reviewed on the legislature’s website. Judy Andrews, chair of the bar association’s Nonprofit Corporations Committee, says that taking this first step would result in real savings of cost and time for nonprofit organizations while the many additional technical issues -- about security, parliamentary procedure, assurances of equal participation, and other knotty questions -- are worked out. There is an issue of public policy as well, though. “It’s important that boards deliberate carefully as they make decisions,” she observes. “It’s not clear that the tools available today for online meetings are ready to handle that responsibility in a completely satisfactory way.” A future issue of Observing Nonprofits will outline the particulars of the new version of HB 1098 when it is introduced in the upcoming session.
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