Can a member of an Arkansas nonprofit corporation give a proxy that directs how their vote should be cast on specific issues?
Plain-English summary
A "directed proxy" is a proxy appointment that tells the proxy holder how to vote on specific issues, rather than leaving the choice to the proxy holder's discretion. State Senator Bryan King asked AG Tim Griffin whether members of an Arkansas nonprofit corporation can use directed proxies. The short answer: yes, by default.
A.C.A. § 4-33-724(a) says that, unless the articles or bylaws prohibit or limit proxy voting, a member of a nonprofit corporation "may appoint a proxy to vote or otherwise act for the member by signing an appointment form." Subsection (f) then expressly contemplates that the member may "include any express limitation on the proxy's authority … on the face of the form." A directed proxy is just an appointment form with such limitations. So Arkansas law affirmatively allows it.
The opinion is careful to note its limits. It addresses what state law allows in the absence of contrary corporate documents, and the AG declined (under A.C.A. § 25-16-701) to interpret the specific corporate documents of the private nonprofit identified in the request.
What this means for you
If you serve on a nonprofit board
By default, a member who appoints a proxy can write specific voting instructions on the appointment form, and the proxy holder is bound by those instructions. If you want to disallow or constrain this, the bylaws or articles can say so. Conversely, if your bylaws are silent, members have the right to direct their proxies.
When you receive a proxy appointment form, you generally must accept it (A.C.A. § 4-33-727(a)-(b)). You may reject it only when you have a "good-faith, reasonable basis for doubt" about the signature's validity or the signatory's authority (subsection (c)).
If you are a nonprofit member or homeowners-association resident
You can sign a directed proxy and have your votes cast as you specified, even if you cannot attend a meeting. Make sure the appointment form clearly says (1) who your proxy is, (2) what meeting it covers, and (3) any express limitations on the proxy's voting authority on specific items. Sign it. Get it to the corporation's authorized agent before the meeting.
If your association's bylaws change the default rule (for example, by prohibiting proxies entirely or requiring a specific form), the bylaws control. Ask for a copy of the bylaws and read the proxy section before relying on this opinion.
If you advise a nonprofit on governance
The opinion gives you a clean default-rule analysis to cite when answering directed-proxy questions. The pivot points are A.C.A. § 4-33-724(a) (default permission) and § 4-33-724(f) (express limitations on the form). For corporate-document interpretation, you remain on your own; the AG cannot opine on private documents.
Common questions
Q: What is a "directed proxy"?
A: The opinion adopts the request's definition: "a proxy which authorizes the proxy holder to vote a specific way on specific issues."
Q: Where do I write the voting direction?
A: A.C.A. § 4-33-724(f) allows you to include "any express limitation on the proxy's authority… on the face of the form." So the appointment form itself.
Q: When does the proxy appointment take effect?
A: A.C.A. § 4-33-724(b)(1) provides the default rule: when the authorized corporate agent receives the appointment form. Articles or bylaws can change this.
Q: Can the corporation refuse to accept my proxy?
A: Only in narrow circumstances. A.C.A. § 4-33-727(a)-(b) requires acceptance in general. Subsection (c) lets the corporation reject if it has a good-faith, reasonable basis for doubt about the signature's validity or the signatory's authority to sign for the member.
Q: Do bylaws override these default rules?
A: Yes. The opinion is explicit that "a corporation's governing documents may alter [the] default rule." If the bylaws prohibit proxies, require a particular form, or limit proxy authority, the bylaws control. Always check them first.
Q: My HOA's bylaws are silent on directed proxies. Can I use one?
A: Under the opinion's reading of A.C.A. § 4-33-724, yes by default. But Arkansas's Horizontal Property Act, which the request mentions, does not regulate proxies, so it would not displace the Nonprofit Corporation Act's default rule.
Background and statutory framework
Arkansas's Nonprofit Corporation Act (A.C.A. ch. 33 of title 4) governs proxy voting in member organizations. The relevant default rules sit in A.C.A. § 4-33-724:
- Subsection (a): A member "may appoint a proxy to vote or otherwise act for the member by signing an appointment form," unless the articles or bylaws prohibit or limit proxy voting.
- Subsection (b)(1): Default effectiveness rule: appointment is effective when received by the corporation's authorized agent.
- Subsection (f): Authorizes the member to include express limitations on the proxy's authority on the face of the form.
A.C.A. § 4-33-727 then governs the corporation's response:
- Subsections (a)-(b): General duty to accept.
- Subsection (c): Permission to reject in narrow circumstances (good-faith, reasonable basis for doubt).
The AG opinion's analytical move is straightforward: a directed proxy is an appointment with subsection (f) limitations, so the default rule in subsection (a) authorizes it. Bylaws and articles can change this; the AG cannot interpret a particular corporation's documents.
Citations and references
Statutes:
- A.C.A. § 4-33-724, proxy appointments
- A.C.A. § 4-33-727, acceptance and rejection
- A.C.A. § 25-16-701: AG cannot engage in private practice of law
Source
Original opinion text
Opinion No. 2024-069
September 13, 2024
The Honorable Bryan B. King
State Senator
871 CR 814
Green Forest, Arkansas 72638
Dear Senator King:
I am writing in response to your request for my opinion whether Arkansas law allows the use of directed proxies by members of a nonprofit corporation. Your request defines "directed proxy" as "a proxy which authorizes the proxy holder to vote a specific way on specific issues."
RESPONSE
By default, Arkansas law allows members of a nonprofit corporation to vote by directed proxy. But a corporation's governing documents may alter that default rule.
DISCUSSION
Although a nonprofit corporation's "articles or bylaws [may] prohibit or limit proxy voting," the default rule in Arkansas is that a member of a nonprofit corporation "may appoint a proxy to vote or otherwise act for the member by signing an appointment form." Under this default rule, the member may, when completing the proxy appointment form, include "any express limitation on the proxy's authority… on the face of the form." By default, the proxy appointment is effective when the authorized corporate agent receives the appointment form.
Under the default rules described above, it is my opinion that directed proxies are allowed by Arkansas law. I again caution, however, that corporate documents can change these rules, and I am not authorized to opine on whether specific corporate documents alter Arkansas's default rule.
Finally, under this default rule, there are a limited number of circumstances in which a corporation may reject a proxy appointment. In general, the corporation should accept a proxy appointment. But if the corporation has a good-faith, "reasonable basis for doubt[ing]… the validity of the signature on [the proxy-appointment form] or about the signatory's authority to sign for the member," it can reject the proxy appointment.
In sum, Arkansas law by default allows a member of a nonprofit corporation to limit a proxy's authority when appointed, which would include a "directed proxy" as you have defined it. But a corporation's governing documents can alter that default rule.
Deputy Attorney General Noah P. Watson prepared this opinion, which I hereby approve.
Sincerely,
TIM GRIFFIN
Attorney General