For entrepreneurs, the concept of having a quorum is essential. Issues decided at a meeting held without a quorum are invalid. The presence of a quorum is determined by the chairman of the board meeting at its opening.
Board Meeting Quorum Meaning
To begin with, an official quorum implies the inferior limit of participants with voting responsibilities in any assembly, necessary for its eligibility. Sometimes, the available total of such participants is less than the minimum required. In this case, they say that the board meeting is not characterized by a quorum. It stands to reason that it is unauthorized, or, to put it simply, illegal. For instance, if a quorum needs 10 participants, and only 8 of them come, the assembly is invalid.
The board meeting quorum can also be defined not in the number of people but as a percentage, that is, 75% of the organization participants. The aspect of distinguishing between the concepts of “the legality of the meeting” and “the legality of decision-making” plays a vital importance. Unfortunately, lots of common people confuse these two fundamental concepts.
A concrete assembly is considered legal if at least half of the deputies attend certain meeting. It should be noted that the illegality of the appointment means for all those present at it that they have wasted their time, not to mention other adverse consequences associated with the impossibility of planning agenda things.
The Board Meeting Quorum Peculiarities
It is generally believed that a quorum in a board meeting features the following specialties:
- the quorum has to be present throughout the assembly on each business issue;
- a board that meets the quorum wants for both public and private organizations is alike;
- the chairperson needs to ensure that the quorum is maintained throughout the board meeting;
- the quorum for an assembly of the board directors implies 1/3 of the total number of directors or 2 directors, whichever is greater;
- a director taking part in video conferences or audiovisual modes will be counted towards the quorum.
If there’s no required quorum, the appointment can take only several insignificant actions that do not involve major changes. These limited steps are to set a time for which to adjourn, have a break, or take action to obtain a quorum, such as offering to contact absent people over a break.
How Big Should the Quorum Be?
Speaking about the quorum for your group, it’s vital to be realistic and logical. You must establish a quorum in the number of participants that can reasonably be expected to appear on a regular basis. The size of the quorum directly depends on the size of your group. To make a long story short, large groups have a smaller quorum, and smaller groups have a larger quorum.
What if there Is No Quorum in the Charter?
In case the quorum is not specified in the articles of association, the quorum is the majority of votes of the people. What counts here is that it is incorrect to say “50% plus one”. It would imply the possibility, with an odd board number, of half a person.
Why Is It Important to Have a Quorum?
The reason for the presence of a quorum is quite obvious. If a minority obliges your organization to act without the notice or presence of other members, this can lead to blatant injustice.