Q&A: Filling a Board Vacancy

Q&A: Filling a Board Vacancy
Q Subsequent to the election of directors at our co-op’s first board meeting, an electee resigned due to personal reasons. The management agency advised against appointing a replacement to the board for approximately four months, the reason given being that an unpopular ex-board member who received minimal votes in the election would be entitled to the spot. Is this reasoning correct?

The shareholders would like a full complement of board members as soon as possible; however, the ex-member would not be considered acceptable. It is my understanding that the new board president has the privilege of deciding how to deal with this matter. Is this correct? What is the appropriate manner in which to proceed with this situation?

— Shareholder Successors

A According to David L. Berkey of the Manhattan-based law firm Gallet Dreyer & Berkey, LLP, “When a member of the board resigns, is disqualified from service or dies, the board vacancy should be filled. Most boards of directors have a great deal of business to attend to and having a full complement of board members helps to get its work done in a timely manner. It is also wise to have an odd number of board members at all times; an even number may lead to a ‘tie’ vote or deadlock on important issues.

“Most cooperative bylaws provide that a board vacancy is filled by majority vote of the remaining members of the board. In some cases, the bylaws provide that a special meeting of shareholders is required to be called to fill the vacancy. It would be extremely unusual for the bylaws to grant the president the power to fill a board vacancy, as the cooperative’s officers are elected by the board of directors.

“The proper procedure is for a board meeting to be called for the purpose of electing a new board member to fill the existing vacancy. The president or any board member can call a special board meeting, usually on two days’ notice to the other board members, and the notice of special meeting should state that the purpose is to fill the board vacancy. At the meeting, the existing board members nominate individuals to fill the vacancy and elect the successor by majority vote. It is always good practice to call the prospective candidates in advance, be sure that they will accept the office if elected, and ask them to be present at the board meeting to address the existing board and explain why they believe they would be a good board member.

“The remaining board members are not obligated to select an unsuccessful candidate who ran for the board to fill a board vacancy. The board members may believe that such person will be antagonistic to them, will promote policies that they do not agree with, or is just not qualified for the position and that the cooperative and its shareholders will suffer by such choice. Instead, the board should select the most competent person available to fill the open seat. The board members may select someone they believe will complement the talents of sitting board members and who will get along with them.

“Should the shareholders, at the next annual meeting or at a special meeting called for such purpose, disagree with the board’s choice and wish to have a different person serve on the board, they can elect a replacement rather than elect the board’s selection to serve another term of office.”

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  • Our condo has 2 vacancies and i am questioning what is the term for the 2 replacements. One vacancy was for a 3 year term and the other a 2 year term. Do the replacements step into the position of those that resigned? And can the remaining board members move from a recently elected 2 year term to a 3 year term at the discretion of the board. It seems if they were elected to a 2 year term they must remain at 2 years and not move up.
  • All of our co op board members have resigned. There are no provisions for this in our by laws. What do we do next?
  • Mike. Play the lottery. You are very lucky. for some reason when elected, board members get glue on their back side and cant get out of the chair under any circumstances.
  • We have a situation where we have 3 board vacancies. 6 qualified shareholders submitted resumes to be considered. Only two of the vacancies were filled. The board refused to disclose why none of the remaining 4 applicants filled the last position. We know for certain that at least 2 more received support from some of the existing board members, but the President claims majority means that 4 out of 6 board members need to vote yes. In the general election, majority means a candidate only has to receive more votes than a competitor. This double standard makes it easy for a board to maintain vacancies for their own benefit. As a background, the last election we voted out a long time President by a landslide, due to mismanagement and corruption. Somehow, the treasurer (a new condo owner and new to board) obtained the President position and retained the treasurer. He has locked out the owners and other board members from analyzing the general ledger. Most recently, he has engineered this vacancy issue. Obviously, as shareholders we have more work to do in the next election, but it would be nice to have alternatives in the meantime. Lawsuits are expensive in NY and the courts are not sympathetic to shareholders or tenants.
  • My husband is the setting president of our condo community and some terms positions are up for vote, but he has another year before his term is up. My question is can the new members vote to remove the setting president and assign a new president?
  • President of the Board is resigning 27 days before the Annual Meeting and Election. The Vice President will take over. Does the open spot on the board have to be filled or can they wait till the election.
  • why would the Mayor of NY create a program that dont oversee issues like this especially when someone has taken complete control and converted the HDFC to their own family Business we are in a situation like this and we cant do anything about it not even UHAB they have also failed us as well i need a lawyer that would take this case probono cause we dont have money to take this Treasurerto court shes using our money we give her for her family we really need help can you please tell me a non profit organization that can assist me as a shareholder theres only 10 units and 5 shareholders 3 shareholder are afraid and are senior citizens and afraid to say anything