Proxies, redux

The last explanation of proxies was pretty dense, so let's try a simpler take on it.

Are proxies allowed?

The first place you go for that answer is State Law. We can imagine State law saying one of four things:
#1 It could say Yes - accepting proxies is mandatory.
#2 It could say No - accepting proxies is forbidden.
#3 It could say Yes, unless disallowed in bylaws.
#4 It could say No, unless allowed in bylaws.

Michigan law says #3. Proxies are allowed, unless disallowed in bylaws. (note 1) In other words, the Bylaws are specifically allowed to override state law.

Bylaws? Those are the governing rules of a nonprofit. Every nonprofit must have them. But they're just rules, right? Do they have the force of law? YES - the above law gives them that force.

But stop for a moment and think about Bylaws.

Imagine you are starting a new nonprofit. Every one must have Bylaws, and you must write them. The Bylaws define how meetings occur. What is an agenda? How do you 'table' motions? When does the chairman vote? Arrrrgh! There are 1000 things to think about. How do you do this from scratch?

The answer is - you don't. There are already rulebooks which answer these questions. Robert's Rules, Riddick's, Demeter's, Sturgis's. Pick one. Include it into your bylaws by reference, and it becomes PART of the bylaws, in the same way that Bylaws are included by reference into state law.

SMRS Bylaws include Robert's Rules of Order. With a proviso: Robert's Rules apply if they are not overridden by 1) state law; 2) Bylaws; and 3) an action of the Board of Directors. (note 2).

Golly, you have to "allow" state law to override Robert's, that's one train you can't stop. Unless state law allows you to override it. (Michigan law allows Bylaws to prohibit proxies.)

Of course, it's also reasonable to allow Bylaws to override Robert's Rules. After all, Robert's got its authority from the Bylaws.

Allowing the Board of Directors to override Robert's is a very useful thing.

So there is the chain of authority.
State law > Bylaws > Board > Robert's Rules of Order.

Now - finally let's look at the question of proxies.

Are proxies allowed at SMRS?

1. State law says "Allowed, unless Bylaws say disallowed."

2. Bylaws say nothing.

3. Board of Directors actions have said nothing.

4. Robert's Rules of Order (note 3) says No, No, No, No! But it also says, if the Bylaws invoke Robert's Rules, that has the same effect as Bylaws prohibiting proxies. (assuming of course that is possible under state law.)

Adds up to: Proxies are disallowed at SMRS.

It is common knowledge that proxies are disallowed at nonprofits governed by Robert's Rules. Even Wikipedia discusses it. That's why I was so shocked when the inspector and the court so casually dismissed Robert's and allowed proxies. You can't dismiss Robert's - it's part of the Bylaws. How could they not know that? Real simple - lawyers are lawyers, not gods. They don't know everything. It's up to parties to remind them, which means it's up to parties to know the law, and be assertive.



Note 1: State Law.

MCL 450.2421 "(1) Except as otherwise provided in the articles of incorporation or in a bylaw adopted by the shareholders or members, a shareholder or member entitled to vote at a meeting of shareholders or members or to express consent or dissent without a meeting may authorize other persons to act for the shareholder or member by proxy."

Note 2: SMRS Bylaws.

(SMRS Bylaws 8.7) PARLIAMENTARY AUTHORITY: The procedures contained in Robert’s Rules of Order, Newly Revised current edition shall be employed in conducting General Membership meetings and meetings of the Board of Directors in all cases to which they are applicable, and in which they are not inconsistent with the laws of the State of Michigan, or of these bylaws or with any particular procedures which the Board of Directors may adopt.

Note 3: Robert's Rules

Roberts Rules of Order, Newly Revised 10th Edition, page 414:
(line 15) PROXY VOTING. A proxy is a power of attorney given by one person to another to vote in his stead; the term also designates the person who holds the power of attorney. Proxy voting is not permitted in ordinary deliberative assemblies unless the laws of the state in which the society is incorporated require it, or the charter or bylaws of the organization provide for it. Ordinarily it should neither be allowed nor required, because proxy voting is incompatible with the essential characteristics of a deliberative assembly in which membership is individual, personal, and nontransferable. In a stock corporation, on the other hand, where the ownership is transferable, the voice and vote of the member also is transferable, by use of a proxy. But in a nonstock corporation, where membership is usually on the same basis as an unincorporated, voluntary association, voting by proxy should not be permitted unless the state's corporation law - as applying to nonstock corporations - absolutely requires it.
(line 32) If the law under which an organization is incorporated allows proxy voting to be prohibited by a provision of the bylaws, the adoption of this book as a parliamentary authority by prescription in the bylaws should be treated as sufficient provision to accomplish that result.