If the corporation is governed by the Canada Not-for-profit Corporations Act (the “CNCA”), quorum is lost and the decision about the material contract must either be adjourned to another time, or dealt with in another way. If the corporation is governed by the Not-for-profit Corporations Act, 2010 (the “ONCA”), the meeting could continue, despite loss of quorum, in order to deal with the material contract. What can the board do in this circumstance? Well, as I explained throughout my presentation in respect of a number of issues – it depends on the jurisdiction. Without this director, the board has only 3 directors present at the meeting and quorum is lost. In the middle of the meeting a director realizes that the material contract the board is about to discuss is with a related party. The number of directors on the board is 7, quorum is a majority, and 4 directors attend the meeting. Scenario: The board of directors meets to review a contract that is material to the activities of the Corporation. Using the following scenario as the basis for interpreting the new legislation, it is interesting to learn how different the legislation is in this area. If quorum is lost at any point, the meeting must be adjourned to a subsequent time when quorum is once again established, and the business from the adjourned meeting completed. One of the general rules about quorum for directors meetings is this: quorum for directors’ meetings must be maintained throughout the meeting. In this article, I thought it would be helpful to review the issue of loss of quorum at a meeting of the board of directors because of a declaration of conflict of interest.Ĭonflicts of Interest and Loss of Quorum? The panel discussion at the end of the seminar raised some very interesting questions and elicited quite an interesting debate on a few points I touched on in my presentation. In addition to voting, I reviewed the rules about quorum and the types of meetings that will now be allowed under the new legislation. In the presentation, I not only discussed the expanded methods of voting that are now allowed under the new legislation1, but I also discussed some practical issues that result from this flexibility. I had the opportunity to present a paper entitled “The Ins and Outs of Voting”. The participants also appeared to be very engaged, which resulted in a lively discussion during the panel discussion at the conclusion of the presentations. Of course, I was one of the presenters so I may be a little biased, but I felt that the program was very nicely balanced and included some very timely and interesting topics. The Charity and Not-for-profit Program entitled “Board Issues under the new Not-for-profit Corporations Acts: Potential Problems and Practical Solutions” presented at the 2012 OBA Institute, was, in my view, a resounding success.
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