Board members must ensure they avoid conflicts of interest when voting on measures they have a vested interest in. We cover the dos and don'ts.
Board members are responsible for making vital and strategic decisions to grow the business and ultimately boost profitability. Some of the key decisions board members address often include:
- Approval of suggested business plans
- Compensation of CEOs and other executives
- Major organizational appointments
- Approval of the fiscal year’s budget for particular campaigns or activities
- Strategic planning
Besides their lucrative compensation, amounting to nearly $250,000 annually, being a part of the board and contributing to board voting procedures is a major career objective for many workers.
At times, the voting rights of board members may not be clearly defined in the voting procedure. Allowing self-voting by board members is a complex matter that depends on a number of factors, including the organization’s unique bylaws, standard industry practices, and state and federal laws.
Can Board Members Vote for Themselves?
Before answering this question, let’s look at some scenarios where board members may be compelled to vote for themselves.
- Advance a personal interest
- A desire for influence and power
- Lack of confidence in other candidates
With these motives, can board members vote for themselves? In a board meeting, all members have a right to vote on the matters at hand, and the matters may directly affect a member. For instance, board members often vote on appointments or compensation, which directly affect those same board members.
In these situations, a board member must inform the rest of the board of any conflicts. They must include details pertaining to any family members who may have a stake in the issue. If the conflict of interest is too substantial, the aforementioned member will be exempted from decision-making on that matter.
Robert’s Rules of Order
To clarify conflict of interest and other agreed-upon rules, many non-legislative organizations, such as private companies, turn to Robert’s Rules of Order to ensure structured committee governance. This framework aids presiding officers in conducting organized, methodical, and goal-focused meetings.
Even though a corporation can alter the rules, such as by implementing bylaws that permit board members to vote for themselves, the organization typically does so with strict regard to the fundamental concepts of Robert’s Rules of Order.
Understanding Board Term Limits
How long should an executive member serve on an organization’s board? How practical are board term limits to an organization? If you intend to serve on the board of directors, it’s essential to understand board term limits as they strongly affect voting and other procedures.
Simply put, board term limits include the total duration an executive officer serves on a board. They are beneficial to an organization and its board resolutions in the following ways:
- Holding board members accountable upon completion of their terms
- Preventing concentration of power
- Promoting diversity by bringing in fresh perspectives and new talent
- Driving innovation and keeping the organization competitive
- Fostering a culture of continuous operational improvement
However, although term limits offer several advantages for an organization, they also bring some drawbacks. The most critical is the loss of institutional expertise and experience, which often contribute to the board’s success over time.
How Board Portal Software Improves Voting
Technology is revolutionizing all aspects of business, from marketing and autonomous data entry to advanced collaboration and teamwork. Modern technology now extends to the boardroom, too. The introduction of board portal software streamlines voting, communication, as well as other board management capabilities.
Board portal software provides a centrally managed, highly encrypted software solution to simplify access to meeting materials, such as the agenda and meeting minutes. Board portal software also enables virtual meetings and improves communication, so members can avoid using personal email addresses.
You’ll benefit from board management software if your organization currently faces:
- Difficulty managing paper-based processes
- Trouble conducting virtual board meetings
- Difficulty in tracking the participation of board members
- Need for greater board meeting efficiency
- Multiple committees or subgroups having trouble accessing information
Ultimately, the board is responsible for steering the company toward sustainable growth and success. To achieve this long-term success, board executives adhere to a set of predefined meeting rules to enhance pivotal decision-making and planning.
Check out OnBoard’s free board meeting agenda template for a small taste of what the software can do for your organization.
About The Author
- Adam Wire is a Content Marketing Manager at OnBoard who joined the company in 2021. A Ball State University graduate, Adam worked in various content marketing roles at Angi, USA Football, and Adult & Child Health following a 12-year career in newspapers. His favorite part of the job is problem-solving and helping teammates achieve their goals. He lives in Indianapolis with his wife and two dogs. He’s an avid sports fan and foodie who also enjoys lawn and yard work and running.
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