Advice to Members on Meetings
Every business and community in BC is being affected by the COVID-19 pandemic and housing co-ops are no exception. CHF BC members have been asking us for advice on a range of issues. The two most commonly asked questions so far are:
This memo will deal with the question of Annual General Meetings and other types of meetings.
We are currently analysing today’s announcement by the federal government of fiscal measures designed to help Canadians in financial difficulty to see how it might affect housing co-ops and co-op members. We will issue a follow-up memo on that issue this week. We will also have advice to share on issues related to the conduct of ordinary co-op business.
Annual General Meetings
The Cooperative Association Act (the Act) provides in section 143 (2) that every co-op in British Columbia must hold an annual meeting of members (AGM) within four months of its fiscal year end. The purpose of the AGM is to receive annual reports from the directors and the auditor, including audited financial statements for the previous fiscal year, and to elect directors according to the Rules of the co-op. There may also be other business done at the AGM that is not required by the Act or the co-op’s rules.
Some co-ops may find that they are unable to hold an AGM by the deadline set out in the Act because the Provincial Health Officer (PHO) has banned gatherings of more than 50 people due to the COVID-19 pandemic. You can read the PHO’s order HERE. Other co-ops with fewer than 50 members may still prefer to postpone the AGM as a “social distancing” precaution against transmission of the virus.
Co-ops have usually been able to delay their AGMs beyond the prescribed deadline with the permission of the BC Corporate Registry. Permission is no longer required for the period March 31, 2020 to September 30, 2020. See our update for more information.
Delaying the AGM does not create any problem for the election of directors or the calculation of directors’ terms of office. Directors serve until the AGM at which their term expires, and for the purpose of calculating term lengths, “years” are not measured in calendar years but as the period of time from one AGM to the next.
Co-ops that decide not to delay holding an AGM will find it challenging to convene a meeting safely and legally. At the moment, gatherings of more than 50 people are prohibited in BC, so larger co-ops will not even have that option. Smaller co-ops expecting fewer than 50 people to attend an AGM should think hard about whether the risk of exposing members to the potential transmission of COVID-19 is worth it, especially when permission to delay the meeting should be easy to secure. Indeed, your members may make that choice for you by not attending in numbers sufficient to achieve quorum.
It is possible to hold a “virtual” meeting that does not require members to be physically present. Platforms like Zoom, Skype, GoToMeeting etc. allow members to hear (and sometimes see) each other. A co-op may have to make allowances for members who do not have access to a computer or an internet connection. Of course, there’s always the good old-fashioned teleconference using a speakerphone, but any form of online or telephone meeting can become unwieldy in larger groups, especially if you do not have experience using the technology. And because AGMs typically involve elections, there’s no obvious way to conduct an election by secret ballot online without using electronic voting applications that add to the expense and complexity of the meeting. Options like email polls and door-to-door ballot collection do not meet the test of a “meeting” as defined in the Act.
To sum up, the best option for any co-op approaching the deadline for holding an AGM will be to seek the Registry’s permission for a delay and carry on with business as usual until holding an AGM is safe and practicable.
Other Meetings of Members
Meetings other than an AGM, where a secret ballot is unlikely or unnecessary, can be held using virtual or online technology, but the challenges described above remain. Conducting polls or seeking member consent by email does not meet the test of a meeting as described in the Act. This is true for meetings of members or directors.
For meetings other than the AGM, the first question to ask is whether you are able to hold a lawful meeting. If your meeting may attract more than 50 members, it will be unlawful based on the order issued by the Provincial Health Officer on March 16. If you can be sure that your meeting will not have more than 50 participants, you should still ask yourself if it is truly necessary. Most regular co-op business can be postponed to a later date, and a meeting to conduct non-essential business is probably not worth the risk of spreading the COVID-19 virus. This is particularly so if you have members who are known to be at risk of more serious complications should they contract the virus, or members who are not self-isolating when they should.
Many co-ops require the approval of members to set new housing charges, and boards may feel that the best interests of the co-op demand that a meeting be held for this purpose in advance of a new fiscal year. In such cases, you should consider alternative financial strategies that might allow a meeting to be held at a later date. This may include postponing a housing charge increase until later in the year.
If you are persuaded that there is no other option, and if your co-op is small enough to allow a meeting to be held within the law and without compromising the safety of members, you should take every recommended precaution to ensure that the risk of transmitting the COVID-19 virus is minimized. To be clear, CHF BC is not recommending that meetings be held in these circumstances, and it is critical that co-op directors and managers make themselves aware of the most recent developments and advice from public health authorities. You can find detailed information about COVID-19 HERE and a daily update from the Provincial Health Officer HERE.
While board meetings typically involve fewer people than members’ meetings, we offer the same advice. Consider postponing all non-essential business to reinforce your commitment to social distancing.
You can also more easily use Zoom, Skype, GoToMeeting etc. for board meetings if every director has access to a computer and an internet connection. Remember that email exchanges and other means of polling directors individually do not meet the test of a meeting under the Act, so you will need to take care that you are conducting business properly.
Board decisions can also be made using what is called a “consent resolution”. Any resolution that is signed by all of the directors currently in office has the same legal force as a motion adopted at a duly called board meeting. Consent resolutions are kept in the board minute book along with meeting minutes. CHF BC can offer additional advice if you are thinking of using consent resolutions to conduct board business.
Please do everything possible to keep yourself and everyone in your co-op safe. Don’t hesitate to contact us at firstname.lastname@example.org with your questions should you require more information.