The Canada Not-for-Profit Corporations Act (CNCA) which now governs many federally incorporated not-for-profit organizations (associations, charities, etc.) allows for Annual General Meetings of Members (AGMs) and Special Meetings of Members to be held for the first time via teleconference or other electronic means. It is important to note that federally incorporated not-for-profit organizations have until October 15, 2014 to continue under the CNCA or they risk dissolution. Information on the CNCA can be found in previous articles written by our colleagues at Pitblado Law.
As an association management company (AMC) we have been working for the last two years with our clients impacted by the CNCA to prepare them for the transition. One area to which we have paid special attention is to ensure that our clients’ new by-laws allow for AGMs to be conducted via electronic means – teleconference or other technology. Should an organization that is incorporated under the CNCA choose to hold an electronic AGM it may require specific language in the organizations by-laws and/or may require a special resolution of the Board of Directors. The CNCA does not automatically allow for electronic AGMs. This should be specifically reviewed with legal counsel or other experts on the CNCA.
June 2014 was when our first association management client chose to hold their AGM via teleconference. To facilitate this we began researching technology providers months in advance. We needed to confirm that the system being used could meet the basic requirements of the CNCA which includes (this is not an exhaustive list of requirements, but rather key items):
- Keeping a record of those participating in the call.
- Ensuring that records of votes were kept, but that votes were kept strictly anonymous.
- Allowing for members to ask questions when required.
Our research led us to use a Canadian company called Pragmatic. We had previously used their services for other needs and therefor were confident in their ability to deliver. To meet our association client’s needs and the requirements of the CNCA we chose an operator assisted conference call which Pragmatic refers to as Event Conferencing.
We used their event call reservation form to gather all our requirements and details. After submitting this to them we were able to arrange a phone call with a representative to go over the details, in case anything was missing or we needed further explanation or clarification. Their staff reviewed the process with us and ensured that we didn’t miss any important details.
As we needed to ensure that only members would be able to call in to cast their vote, we sent Pragmatic a list of the association’s members and their operators then acted as the scrutineers. If anyone were to call in who was not on our list the operator was then able to connect with us on a separate communications line to verify membership.
Voting was made easier by using a touch-tone casting system. The operators guided the members on how they could make a comment to a motion, followed by using the touch-tone feature to cast their votes. The operator then provided us with the tally of yay and and nay votes on each motion. Following the AGM we were provided with an audio recording of the call and a list of all the participants.
As with any system the first time you use it, we had a few technical and other difficulties. Our impression is the team at Pragmatic take these issues seriously and are working on avoiding them in the future.
Overall our association client was happy with the way their AGM unfolded via teleconference. In their specific case they need to be able to have their AGM in this format as the CNCA requires that AGMs be held within six months of year-end. This association’s fiscal year-end is December 31 and their annual conference is in the fall. This meant that either they had their AGM via teleconference or they would have had to arrange an in person AGM which can be challenging for a national association. The teleconference-based AGM allowed members from across the country to participate and to fulfill the need of hosting the AGM within 6 months of their year end.
I expect that now that electronic AGMs are an option that we will see more associations adopt them. If your organizations chooses this method make sure that the AGM is conducted in a manner that satisfies the requirements of the CNCA.
The above is provided for informational purposes only. It does not constitute legal, or other professional advice, and you may not rely on it as such.