Corporate governance for some closely-held entities has evolved to the point where much of the governance business is conducted by unanimous written resolution. Governing legislation usually starts with the presumption that a meeting is to occur, but offers a statutory alternative of accomplishing the same tasks by unanimous written consent resolution of the participants. As a result, formal governance "meetings" of members or directors of closely-held entities are held less often, unless matters of controversy arise.
However, there is at least one set of circumstances in British Columbia corporate governance where an organization must continue to hold an actual meeting, and this requirement is sometimes overlooked by those who just assume that in today's age written resolutions are always acceptable to perform governance tasks.
Under the Society Act (British Columbia), a non-profit society is required to hold an annual general meeting (AGM) of its membership. While written consent resolutions may be used for other member proceedings (including special resolutions to alter the Constitution and Bylaws), at least once a year the members must actually meet, to conduct the annual members business. That business usually includes such items as electing directors, receiving financial statements, and appointing auditors (if applicable).
For many BC societies with a broad constituency membership (such as golf clubs or industry associations) the task of assembling in person once a year is appropriate and routine. However, for certain other closely-held BC societies, often where there is no broader membership (in essence, the only members are also the directors), this formality is sometimes overlooked. There must actually be a meeting for the AGM. Written resolutions are not a valid substitute.
To complicate matters, the Society Act requires that the AGM must be held in British Columbia, unless specific consent of the BC Registrar is obtained to hold the AGM outside the province. While in our experience such consents are routinely given when applied for, it appears to be an administrative policy of the Registrar that consents will only be given in advance of the meeting date, and not after.
A society's bylaws can provide some partial relief if they contain enabling provisions for participation in meetings by way of proxy or by teleconference. However, if a society is working with older governance documents which may not have been updated recently, such relief may be absent and might be the subject of further formalities to ensure the governance requirements are met.
It is expected that BC's Society Act will be updated through a law reform process in the next couple of years. As part of that reform, the requirement to actually hold a meeting for the AGM may be modified to permit written consent resolutions as a governance alternative. Until then, however, BC societies need to remember to meet ... in person ... once a year.
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