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Virtual Meetings After the Pandemic

Zooming in. Convenience, increased shareholder participation, surprisingly glitch-free elections – at this point, many co-ops know the upside of holding virtual annual meetings, which have become commonplace during the coronavirus pandemic. But boards that want to continue conducting them online will need to examine their governing documents, because without express permission in their bylaws, they don’t actually have the authority to do so.


Paving the way. A 2019 amendment to the Business Corporation Law, which governs how most co-ops must operate, permitted hybrid meetings in which at least one person is in a specified location while everyone else participates remotely. But in response to the COVID-19 outbreak, Gov. Andrew M. Cuomo issued an executive order in March 2020 temporarily suspending the requirement to hold annual or special meetings at a specified site, paving the way for co-ops to proceed with all-virtual gatherings.


The clock is ticking. The emergency order, however, is set to expire in December 2021, and most governing documents don’t specifically permit virtual meetings. “Bylaws typically require that annual meetings be held in a fixed place, whether it’s the city, borough or your building, that is designated in the notice of meeting,” says David Berkey, a partner at the law firm Gallet Dreyer & Berkey.


If a co-op’s governing documents do specify a location, or if the bylaws permit voting only in person or by proxy, a board can’t simply choose to continue to have virtual meetings and elections after the pandemic has passed, according to Helene Hartig, the principal at Hartig Law. “You have to pass an amendment to your bylaws permitting them,” she says. “Otherwise you won’t be protected if there are objections by shareholders that the meeting or election was not legitimate.”


The bottom line. Even if the executive order remains in place, it’s still a smart move for boards to amend their bylaws. “It’s easy enough to do, and you do want the option,” Berkey says. “By declaring that all-virtual meetings can be conducted, you’re covered either way.”

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