EFFECT OF CUMULATIVE VOTING
ON REMOVING INDIVIDUAL DIRECTORS

If an association's CC&Rs or bylaws provide for cumulative voting, removing less than the entire board requires a two step process. Once a petition for removal has been submitted to the board, the membership must vote by secret ballot to remove the director. However, a minority of the membership can block the removal. The process is confusing, the statute is badly written, and authorities disagree on how it should work. Following is one interpretation:

Step #1: APPROVING THE RECALL. As provided for in Corp. Code §7222(a) any or all directors may be removed without cause if:

• In a corporation with fewer than 50 members, the removal is approved by the affirmative vote of a majority of all members entitled to vote.

• In a corporation with 50 or more members, the removal is approved by the affirmative vote of a majority of the votes represented and voting at a duly held meeting at which a quorum is present, with the affirmative votes also constituting a majority of the required quorum.

Step #2: BLOCKING REMOVAL. Even if the membership votes to recall a director, the recall can be blocked. AS provided for in Corp. Code §7222(b), no director may be removed when the votes cast against removal would be sufficient to elect the director if voted cumulatively at an election where all memberships entitled to vote were voted (since all voting must now be done by secret ballot). The following formula will provide the number of votes needed to block the recall:

M = total number of members
D = total number of open seats in the election at which the director was elected
X = number of votes needed to block recall

Example. Assume the following: (i) the association has 100 members, (ii) quorum requirements were met, and (iii) there is a five-member board with all five directors standing for election each year. That means 18 "no" votes can block the recall.

Staggered Terms. If the board has staggered terms, then the number of directors "D" in the formula is equal to the number of directors in the election cycle in which the particular director was elected. If the association elects two directors in even-numbered years and three directors in odd-numbered years, and the target of the recall was elected in an even-numbered year, then D=2 and the number of "no" votes needed to block recall is 34. (See sample ballot)

Electing Replacements. Once a director has been recalled, a replacement must be elected.

RECOMMENDATION: We recommend that associations amend their governing documents to eliminate cumulative voting. This will not only make elections easier to conduct, it also makes it easier to remove disruptive directors from the board.

If your association is facing a recall election, you should follow the advice of your legal counsel as to the proper formula to use.

Updated by ADAMS KESSLER 10/3/2008