Corporations are required to draft bylaws during startup that set the procedures for overall management of the company. The bylaws typically establish the maximum number of board members that can sit on the corporation's board of directors, the length of time each can serve and the process for adding or replacing members. Once the bylaws are ratified by the initial board of directors, their provisions can only be changed by amendment, either through the amendment procedures stated in the bylaws or by majority vote.
Consult the corporation's bylaws to determine the procedures for managing the composition of the board of directors. If fewer members are currently sitting on the board than the bylaws authorize, follow the nominating and voting protocol established by the bylaws to add a new member. Typical bylaws will require a potential board member to be nominated and vetted by the current board, whose members would then vote on the candidacy. The new member can be added to the board of directors if a majority of current members vote in support.
Propose an amendment to the bylaws if the board is currently at the maximum number of members allowed. An amendment should be circulated in advance of a general board meeting, discussed at the meeting and voted upon. If a majority of board members agree to the change, the amendment would be ratified and the new director processed in accordance with ordinary procedures. Some corporations require that changes to the bylaws be ratified by a majority of shareholders instead of a majority of the board, in which case the matter would have to be added to the agenda of a general shareholders meeting and voted upon there.
Present the candidacy of the potential director to the current board and vote on the matter if the corporation has not adopted bylaws. Certain corporations operate without bylaws. Although this is ill-advised and goes against the corporate formation statute in most states, there is no regulatory body that checks to see if a corporation has actually put bylaws in writing. A board can simply vote to add a new member when no controlling procedure exists.
Memorialize the addition of the new director in the corporate record. Have the board secretary include the results of the vote and the pertinent details of the discussion vetting the candidate in the minutes to the board meeting. Add the director's contact information and résumé to the corporation's personnel files. Adjust the official board history to note the date of the addition in case there are legal issues in the future and the corporation has to refer back to who was sitting on the board at a particular time. Make changes to all public communications that list current board members.
Consider setting up an advisory board in lieu of adding members to the board of directors or amending the bylaws. An advisory board engages supporters without obligating them to oversee the affairs of the corporation. It can be staffed without adhering to the formalities needed for members of the board of directors under the bylaws. Advisory board members can be just as helpful to the corporation as regular board members.
- Consider setting up an advisory board in lieu of adding members to the board of directors or amending the bylaws. An advisory board engages supporters without obligating them to oversee the affairs of the corporation. It can be staffed without adhering to the formalities needed for members of the board of directors under the bylaws. Advisory board members can be just as helpful to the corporation as regular board members.
Terry Masters has been writing for law firms, corporations and nonprofit organizations since 1995. Her online articles specialize in legal, business and finance topics. She holds a Juris Doctor and a Bachelor of Science in business administration with a minor in finance.