Lately, it seems that more and more associations are conducting business via electronic means such as e-mail, facsimile and video. For instance, some associations are allowing directors and/or members to vote via internet or use e-mail or facsimile as a means of conveying consent for actions without meetings. This article discusses pertinent issues with respect to associations taking a leap into the electronic era.
 
ACTIONS WITHOUT A MEETING
 
The Revised Colorado Nonprofit Corporations Act (the “Act”) allows actions to be taken by associations without holding an actual meeting. Specifically, the Act provides that actions that are normally taken at a members meeting may also be taken without a meeting, if members entitled to vote on such action unanimously agree and consent to such action in writing. The Act further provides that the written consent may be received by the association by electronically transmitted means, such as facsimile or other form of wire or wireless communication.
 
The Act also allows board actions (as opposed to actions voted on by the membership) to be taken without a board meeting. Specifically, the Act allows a board to take action without a meeting if every board member votes for the proposed action in writing or votes against the actions and waives the right to demand a meeting in writing. The Act further provides that such written vote and waiver may be submitted by electronic means, including facsimile or other form of wire or wireless communication.
 
E-mail is a typical example of a form of wireless communication, and is therefore authorized by the Act as a means of transmitting consent or waiver with respect to taking an action without a meeting. Nevertheless, the Act also provides that an association’s bylaws may provide for something contradictory to the Act. Therefore, it is important for associations to be aware of provisions contained in their bylaws, and be aware if the bylaws do have a provision prohibiting use of electronic means in obtaining consents, votes and/or waivers. If your bylaws have such a provision, the association may not use electronic means for this purpose. 
 
PARTICIPATION IN MEETINGS VIA ELECTRONIC MEANS
 
The Act allows members to participate in any members meeting through the use of any means of communication which allow all persons participating in the meeting to hear every other person participating in the meeting. The Act allows directors to participate in board meetings in exactly the same way.
 
Due to the broad terminology used in these sections, any electronic means that allow all the persons participating in the meeting to hear each other, conforms with the requirements of the Act. Examples of technologies that conform with these requirements include, but are not limited to speaker phones, conference calling and video conferencing.
 
INTERNET VOTING
 
A new trend is emerging by which associations conduct their director elections using an internet voting system in lieu of a meeting. The Act allows member actions by written ballot instead of holding and voting at a member meeting. The Act requires the written ballot be “delivered” to every owner entitled to vote, however the method of delivery is not discussed. Nor does the Act spell out the method by which such ballots are to be returned to the Association.
 
It would be logical that written ballots may be delivered to owners via e-mail or internet means. Additionally, such ballots may be cast and returned to the association via electronic means, such as the internet.
 
An internet voting system generally contains two components: a front end and a back end. A front end includes a web site, ballot and results of the election. The front end is accessible by the voters and the public and may be used by members for voting and viewing election results. The back end is not accessible for viewing by the owners or public, and is primarily composed of security systems, data bases and algorhythms.
 
Internet based voting systems contain built in protections from hackers and unauthorized users. Votes are counted and confidential client data is protected. In order to use the voting system, members are required to send to the system administrator, via e-mail, a file containing their name, address, number of votes and e-mail address. After this data is processed, the member receives a user name and password. This is used to access the internet based voting system and cast votes.
 
Conducting elections via internet has several advantages over using traditional paper systems. First, using electronic means decreases the association's costs of paper, printing, mailing and processing materials used in conventional election systems, such as ballots, proxies and notices. Additionally, electronic based systems are generally viewed as being more convenient for the voters. Paper notices and proxies often get misplaced and lost or forgotten. However, with an internet based meeting, all the owner need do is log on, cast his vote, and/or video conference in.
 
If your community is interested in setting up a computer based voting system, or you would like additional information concerning internet voting and elections, go to: iBallot.com. Iballot is a company specializing in online election services to community associations.