Voting on a vereniging's board and conflicts of interest

The board of a vereniging (association) is authorised to make decisions on a wide range of matters. For example, you may decide on policy, financial matters, contracts, the management of staff, and the organisation of activities and events.

Members have a say

For some decisions, the law requires approval from the general meeting of members (algemene ledenvergadering, ALV)). This is where the members of a vereniging meet regularly.

This applies to major strategic decisions, amendments to the articles of association, and significant expenses. But it also applies to the appointment or dismissal of board members, the approval of the financial statements, a merger, a demerger, or the dissolution of the vereniging.

Majority rule

Usually, the board makes decisions based on the ‘majority rule’ principle. This means that each board member has 1 vote at the board meeting. and the proposal receiving the most votes is adopted. 

Articles of association and ‘quorum’

It is usually agreed that a certain number of board members must be present for a vote to take place, for example at least half. This is called a ‘quorum’. These kinds of agreements are set out in the articles of association.

The articles of association may state that in certain situations you must vote in writing or by secret ballot. For example, when voting on a new board member. Or that in some cases, members who are not on the board may also vote.

A tied vote

In the articles of association, you can also include instructions for what happens if an equal number of directors vote against and in favour of a proposal.

In the event of a tie, the chairperson often determines the outcome, for example by casting the deciding vote. However, such an arrangement must be included in the articles of association.

The law states that a board member may not cast more votes than all the other directors combined. Suppose a board consists of 3 directors and the articles of association state that the chairperson may always cast 2 votes. In that case, the chairperson may not cast 2 votes if 1 of the other directors is absent. That would give the chairperson too much power.

Conflicting interests

As a board member, you must act in the interests of the vereniging. But what should you do if your own interests conflict with those of the vereniging?

Sometimes there are situations in which it is not appropriate for you, as a board member, to be involved in decision-making. For example, if you have an interest that is not the same as that of the vereniging. The Act on Management and Supervision of Legal Entities (Wet Bestuur en Toezicht Rechtspersonen, WBTR) states that, in such a case, you as a director may not vote on the decision.

An example: Janine is on the board of the hockey club, and her husband is a contractor. The board must choose which contractor will renovate the canteen. Janine’s husband’s business is one of the candidates. Because Janine has an interest in her husband being awarded the contract, she is not allowed to vote.

Too few board members to vote

If just 1 person is barred from voting, this can lead to a problem. For example, if this means there are too few board members to make a decision.

Do the articles of association state that the board may only make decisions by having at least 3 directors vote and then implementing the plan with the most votes? In that case, a decision by 2 directors is not enough. If they each vote for a different plan, you end up with a tie.

If you cannot make a board decision because there are too few board members or the votes are evenly split, the law states that the Supervisory Board must make the decision. They oversee the board. If there is no Supervisory Board, the members will make a decision at the general meeting.

Director ill, absent, or deceased

Is a director ill, absent, or deceased? The articles of association must specify what happens if the board cannot make decisions because a director is absent due to suspension, illness, dismissal, resignation, or death. For example, that the supervisory directors or the general meeting then makes the decisions. This prevents problems, such as delay of the decision-making process or a failure to take an important decision at all.

The law refers to these situations as ‘inability to act’ or ‘absence’. These terms should also be included in the articles of association. Inability to act is when a director is temporarily unable to perform their duties. Absence is when a director has stepped down.