LEGAL.

Q: Can members or directors of an association use e-mail to take action on association business matters?

A: Yes, provided taking action by electronic means is allowed by applicable state law and the association's bylaws.

Member action. Where member voting by mail balloting is allowed, e-mail voting may be appropriate if an association can establish that all its members use and receive e-mail and that its bylaws permit member voting by e-mail, whether explicitly or by analogy to regular mail. As with voting by regular mail, the association must ensure that all members eligible to vote are given appropriate notice of the issue to be voted on and must have a method of ensuring that members cannot vote more than once on an issue.

In addition, quorum requirements must be met (e.g., a certain number of ballots must be returned for a mail vote to be valid). Some states' nonprofit corporation statutes require a very large quorum on certain issues.

Director action. Board business may be conducted electronically if the provisions of the applicable state law and the organization's bylaws are broad enough to permit it. For example, a provision that allows directors to take action at a meeting "by means of which all of the directors are able to communicate with each other" may be sufficient to allow directors to take action electronically. In such an instance, directors would be able to use a "chat room" or "white board"--an arrangement that allows all participants to interact with each other on a real-time basis-to conduct a meeting.

However, a provision requiring all directors to be able to "hear" each other at a meeting would likely preclude an electronic meeting. For the action to be valid, the applicable notice and quorum provisions also must be satisfied. In other words, the association must

* ensure that all directors are given proper notice; and

* have a means to establish which directors are "present" at the meeting for purposes of establishing a quorum.

A board meeting conducted using only e-mail or an e-mail list format in which directors are allowed a period of several days to respond on an issue is not likely to satisfy the definition of a "meeting." Where board action without a meeting is to be taken, most states require unanimous written consent. Such consent could be evidenced by electronic means if the organization were able to authenticate the validity of respondents' electronic signatures.

Obviously, not all board or member decisions are conducive to electronic decision making. An association's staff and board need to carefully consider the advisability of taking action electronically.

Jed R. Mandel, partner of Neal, Gerber & Eisenberg, Chicago. Mandel is a member of ASAE's Ask the Legal Section Committee. The "Legal" item is not intended as legal advice but rather as an educational overview.