Parliamentary procedure in the corporate world

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Parliamentary procedure in the corporate world may follow traditional parliamentary authorities such as Robert's Rules of Order or simpler rules of order considered by some commentators to be more appropriate in the corporate setting.

Contents

Use of parliamentary authorities in corporate meetings in the United States

In general

State statutes typically do not prescribe a particular parliamentary authority to be used in corporate meetings. For instance, the Davis-Stirling Act, a California statute, provides that certain business meetings "shall be conducted in accordance with a recognized system of parliamentary procedure or any parliamentary procedures the association may adopt." [1]

Donald A. Tortorice's The Modern Rules of Order is a parliamentary manual for use in the corporate world. His book includes statements such as "Procedural measures are no substitute for leadership" and "A principal element of these rules is to place the requisite authority in the hands of the Chair to lead the meeting through its business, using these rules as a guide to what should be done and not as an unyielding mandate as to what must be done." However, it is noted that the motion to appeal from the decision of the chair or to declare the chair vacant and elect a new chair remains a procedural safeguard to abuses by the chair. [2]

Shareholders meetings

The ABA Handbook recommends the abolition of parliamentary procedure at shareholder meetings and the strong concentration of authority in the meeting chair, subject to a fairness standard of conduct, concerning virtually all matters of order, recognition, voting procedures, and adjournment. [3]

With regard to stockholders' meetings, one legal commentator has noted: [4]

Roberts' Rules are viewed as inappropriate for several reasons. First, Robert's and other rules of parliamentary procedure are so complicated that a typical stockholder is unlikely to understand, or become well versed in, their operation. Second, to run stockholders' meetings properly with parliamentary rules, corporations would be required to hire parliamentarians. Finally, and most important, Roberts' Rules were designed for deliberative assemblies in which each member has an equal vote. As a consequence, Roberts' Rules are not well suited to stockholders' meetings where each person's opinion or vote has a different weight depending on the number of shares that person owns. Moreover, Roberts' Rules are especially not well suited to situations in which management has already solicited proxies sufficient to control the outcome of all decisions being made at the meeting.

The case of People v. Albany & Susquehanna R.R. established that a corporate election will be set aside if a faction of shareholders conducted the meeting in a manner that bore the appearance of "trick, secrecy or fraud." Other cases have further limited the power of the chair, noting, for instance, that the chair cannot adjourn a meeting, even in the absence of a quorum, without a vote of the assembly. [5] The principles of majority rule must be followed and cannot be abrogated by the chair. [6]

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Robert's Rules of Order Newly Revised, commonly referred to as Robert's Rules of Order, RONR, or simply Robert's Rules, is a political book based on the original Robert's Rules of Order written by Henry Martyn Robert. It is the most widely used manual of parliamentary procedure in the United States. It governs the meetings of a diverse range of organizations—including church groups, county commissions, homeowners associations, nonprofit associations, professional societies, school boards, and trade unions—that have adopted it as their parliamentary authority.

Parliamentary procedure Guidelines to conduct meetings

Parliamentary procedure is the accepted rules, ethics, and customs governing meetings of an assembly or organization. It is supposed to represent the will of the majority. Its object is to allow deliberation upon questions of interest to the organization and to arrive at the sense or the will of the assembly upon these questions. Self-governing organizations follow parliamentary procedure to debate and reach group decisions—usually by vote—with the least possible friction.

Quorum Minimum number of members of a deliberative assembly necessary to conduct business

A quorum is the minimum number of members of a deliberative assembly necessary to conduct the business of that group. According to Robert's Rules of Order Newly Revised, the "requirement for a quorum is protection against totally unrepresentative action in the name of the body by an unduly small number of persons." In contrast, a plenum is a meeting of the full body.

A by-law is a rule or law established by an organization or community to regulate itself, as allowed or provided for by some higher authority. The higher authority, generally a legislature or some other government body, establishes the degree of control that the by-laws may exercise. By-laws may be established by entities such as a business corporation, a neighborhood association, or depending on the jurisdiction, a municipality.

In parliamentary procedure, an adjournment ends a meeting. It could be done using a motion to adjourn.

Minutes Written details of a meeting

Minutes, also known as minutes of meeting, protocols or, informally, notes, are the instant written record of a meeting or hearing. They typically describe the events of the meeting and may include a list of attendees, a statement of the issues considered by the participants, and related responses or decisions for the issues.

Corporate law Body of law that applies to the rights, relations, and conduct of persons, companies, organizations and businesses

Corporate law is the body of law governing the rights, relations, and conduct of persons, companies, organizations and businesses. The term refers to the legal practice of law relating to corporations, or to the theory of corporations. Corporate law often describes the law relating to matters which derive directly from the life-cycle of a corporation. It thus encompasses the formation, funding, governance, and death of a corporation.

An agenda is a list of meeting activities in the order in which they are to be taken up, beginning with the call to order and ending with adjournment. It usually includes one or more specific items of business to be acted upon. It may, but is not required to, include specific times for one or more activities. An agenda may also be called a docket, schedule, or calendar. It may also contain a listing of an order of business.

Gavel Hammer or mallet used in a court

A gavel is a small ceremonial mallet commonly made of hardwood, typically fashioned with a handle. It can be used to call for attention or to punctuate rulings and proclamations and is a symbol of the authority and right to act officially in the capacity of a presiding officer. It is often struck against a sound block, a striking surface typically also made of hardwood, to enhance its sounding qualities. According to tradition, Vice President John Adams used a gavel as a call to order in the first U.S. Senate in New York in the spring of 1789. Since then, it has remained customary to tap the gavel against a lectern or desk to indicate the opening and closing of proceedings and to indicate that the judge’s decision is final. It is also used to keep the meeting itself calm and orderly.

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The chairperson is the presiding officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office, who is typically elected or appointed by members of the group, presides over meetings of the group, and conducts the group's business in an orderly fashion.

Proxy voting is a form of voting whereby a member of a decision-making body may delegate his or her voting power to a representative, to enable a vote in absence. The representative may be another member of the same body, or external. A person so designated is called a "proxy" and the person designating him or her is called a "principal". Proxy appointments can be used to form a voting bloc that can exercise greater influence in deliberations or negotiations. Proxy voting is a particularly important practice with respect to corporations; in the United States, investment advisers often vote proxies on behalf of their client accounts.

In parliamentary procedure, reconsideration of a motion may be done on a matter previously decided. The motion to "reconsider" is used for this purpose. This motion originated in the United States and is generally not used in parliaments. A special form of this motion is reconsider and enter on the minutes.

In parliamentary procedure, a motion is a formal proposal by a member of a deliberative assembly that the assembly take certain action. Such motions, and the form they take, are specified by the deliberate assembly and/or a pre-agreed volume detailing parliamentary procedure, such as Robert's Rules of Order, Newly Revised; The Standard Code of Parliamentary Procedure; or Lord Critine's The ABC of Chairmanship. Motions are used in conducting business in almost all legislative bodies worldwide, and are used in meetings of many church vestries, corporate boards, and fraternal organizations.

In parliamentary procedure, a suspension of the rules allows a deliberative assembly to set aside its normal rules to do something that it could not do otherwise. However, there are rules that cannot be suspended.

United States corporate law

United States corporate law regulates the governance, finance and power of corporations in US law. Every state and territory has its own basic corporate code, while federal law creates minimum standards for trade in company shares and governance rights, found mostly in the Securities Act of 1933 and the Securities and Exchange Act of 1934, as amended by laws like the Sarbanes–Oxley Act of 2002 and the Dodd–Frank Wall Street Reform and Consumer Protection Act. The US Constitution was interpreted by the US Supreme Court to allow corporations to incorporate in the state of their choice, regardless of where their headquarters are. Over the 20th century, most major corporations incorporated under the Delaware General Corporation Law, which offered lower corporate taxes, fewer shareholder rights against directors, and developed a specialized court and legal profession. Nevada has done the same. Twenty-four states follow the Model Business Corporation Act, while New York and California are important due to their size.

Canadian corporate law

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Speaker of the Jatiya Sangsad

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References

  1. ↑ "Civil Code § 1363". Davis-Stirling.com. 2018-03-06. Retrieved 2019-10-06.
  2. ↑ Tortorice, Donald A. (2007). The Modern Rules of Order. American Bar Association. p. 12. ISBN   978-1-59031-792-1.
  3. ↑ Varallo, Gregory; Rollo, Richard (April 2001). "Developments In Shareholders' Meetings: New Delaware Legislation And The ABA Handbook". Insights: Corporate & Securities Law Advisor. 15 (1): 9–13. Archived from the original on 2011-05-25. Retrieved 2019-10-06– via bowne.com.
  4. ↑ "Business Law Today: Conduct unbecoming a stockholder?". abanet.org. 2006-10-24. Retrieved 2019-10-06.
  5. ↑ "State ex rel. Price v. DuBrul, 126 N.E. 87, 100 Ohio St. 272 (1919)". Caselaw Access Project. 1919-07-08. Retrieved 2019-10-06.
  6. ↑ "American Aberdeen-Angus Breeders' Ass'n v. Fullerton, 325 Ill. 323, 156 N.E. 314 (1927)". CourtListener. 1927-04-20. Retrieved 2019-10-06.
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