Our general manager and outside legal counsel have presented to the board an after action report on the June 30 annual meeting and options. Three options are presented, and we have our own suggestions. We applaud the authors for assuming the objective is to hold annual shareholders’ meetings that have quorums and result in shareholder elections of board members–not to protect the power of incumbents to appoint their successors or to count the votes in the shortest possible time after the meeting.
We suggest the board set a timetable that staff must meet unless the board affirmatively intervenes to change the schedule. No more informal delays by the CEO, Treasurer, staff, or outside accounting firms. Our proposal:
- There shall be included with the monthly invoices for water sales mailed in the third month of the new fiscal year an invitation to all shareholders to self-nominate themselves for election to the board of directors at the next annual meeting, along with the statement that such persons may have included in the notice of annual meeting to be sent in the fourth month of the new fiscal year a copy of their campaign statements (not to exceed 400 words) and listing of their names on the official management proxy form.
- The complete annual financial report reviewed by independent CPAs shall be mailed to all shareholders not later than the 120th day after the end of the fiscal year, and the mailing shall include a notice of annual meeting to be held at a certain time and place not less than four weeks after this mailing date and not more than 60 days after the second Monday in March. This mailing shall also include the form of management proxy, and may include other information consistent with prior practice or pursuant to specific direction from the board. In order to meet this deadline, the board shall have decided not later than two weeks before the mailing deadline all relevant questions only it can decide such as the amount of any 401(k) contribution and any asset impairments. The board shall call special meetings if necessary to keep on this schedule.
The rules for proxy solicitation and conduct of the meeting shall provide that proxies may be submitted until the annual meeting, including any adjournment thereof, is called to order. The rules shall also provide that if it cannot be readily ascertained at the commencement of the meeting that a quorum is present, agenda items not requiring a vote shall proceed. Then the meeting shall be adjourned for exactly three weeks and submissions of proxies may continue until the re-commencement of the adjourned meeting. (This disagrees with the staff report suggestion that acceptance of proxies should end two weeks before the meeting date. It is more important to get a quorum and a definitive election than to publish the results in the shortest possible time after the meeting.)