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What are board of director voting procedures?

August 10, 2018
0 min read
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Board of director voting procedures are the way that board directors make decisions. Because corporations depend on their boards to make vital decisions that impact their company's future, it's crucial for board of director voting procedures to be accurate, efficient, transparent and secure.

How boards handle the process of decision-making is central to how effective their decisions will be. Board of director voting requires a skilled board chair who uses some form of parliamentary procedure such as Robert's Rules of Order. Some corporations have written into their bylaws that boards must use Robert's Rules of Order as their board meeting protocol.

Board of director voting for decision-making begins when a board director makes a basic motion. Motions are a statement of a proposal for an action. There are various steps in making and approving motions. Once a board director makes a motion, the board needs to handle it in some way.

Traditionally, boards have counted votes in various ways. Online voting is more accurate, efficient, secure and transparent than older, traditional methods. For these reasons, boards are turning to online voting as the most preferred means of voting. Diligent Corporation recently added some useful and valuable enhancements to their Voting & Resolution tool, which is part of a suite of electronic tools called Governance Cloud.

Types of Votes that Boards Make

Boards may need to vote on any number of important matters throughout their fiscal year. Board directors primarily vote on actions and resolutions. Boards may also cast votes for issues such as strategic planning matters, approving a business plan, approving a budget, approving committee chairs, approving executive compensation and other necessary matters.

Basic Voting Procedures

Board directors may make motions before a board meeting and ask the board chair to include them in the agenda for a board of directors' meeting. Board directors may also make motions during a board meeting.

The board chair must handle all motions in some matter. Boards can second and vote on a motion or move to amend a motion. The board director making a motion may also decide to withdraw the motion. A motion that isn't seconded dies without further discussion.

There are four basic steps in making motions. A board director makes a motion and then someone seconds it. The board chair calls for discussion, and then the board votes. The point of making a motion is for the board to consider whether the issue warrants taking time for a discussion and a vote.

To make a motion, a board director simply states, 'I move...' and then states the motion. Motions should be worded specifically, clearly and concisely and in a way that there is no uncertainty as to what the motion means. For complex motions, board directors may ask the board chair if they can take a short break to have time to formulate their wording with clear intent. The board chair doesn't allow discussion on the motion at this juncture.

The next step is for another board director to second the motion. The person who seconds a motion doesn't necessarily have to support the motion. They just have to agree that the motion is worthy of considering. The individual doing the seconding simply says, 'I second the motion.' In rare situations, board directors may feel that a motion isn't worthy of discussion. In the instance where a motion doesn't get a second, the board chair states, 'The motion dies for lack of a second,' and the motion dies.

Once a motion has been made and seconded, the board chair opens up the meeting for discussion on the motion. All comments must be made through the board chair and all members should request to have the floor to speak. Board chairs should give members the right to speak, make motions, advocate a position and vote. The board chair controls the discussions to be sure they are orderly, fair and balanced. When the board chair decides that all members have had a fair opportunity to offer their opinions, the chair closes the discussion and asks for a vote. The final step is for the board chair to announce the result of the vote.

Traditionally, board of director voting procedures entailed asking for a show of hands or a verbal aye or nay. In rare situations involving confidential or sensitive matters, board chairs might set up a secret ballot. Software solutions have made it possible for boards to vote online. The ease of online voting, combined with strong security and mobility, makes online voting popular with board directors.

Benefits of Online Voting

Diligent Voting & Resolution software is the most advanced and secure voting software tool available. The program fully integrates with Diligent Boards and other online Enterprise Governance Management solutions that comprise Governance Cloud.

Diligent recently added valuable enhancements to the Voting & Resolution software based on feedback from board directors.

The enhancements enable board administrators to customize the type of voting, including yes/no votes or for/against/abstain without a signature votes. The program also sends notifications to board directors when new votes are available.

One of the new features of the Voting & Resolution tool is the Quick Voting feature, which is perfect when boards need fast votes on things that need little or no discussion, like standard unanimous consents. The new enhancements allow board directors to vote anonymously and add comments if they choose. Board administrators can also opt for the results tallying feature, which displays voting results in real time.

Board directors of multiple boards will enjoy the convenience of being able to apply their profiles and electronic signatures to all their log-ins by simply enabling the board overlap function.

Board directors will find many purposes for the Voting & Resolution tool, including having board members sign 10-K and SEC forms, approving policies and meeting minutes, and voting on external directors joining subsidiary boards.

All board directors will enjoy the convenience of being able to vote from anywhere using the iPhone Diligent app.

Board of director voting procedures can make a huge difference in recording accurate votes in the most efficient manner. The new voting enhancements make Diligent's Voting & Resolution tool the best choice for board of director voting procedures.


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