What Is a Quorum?

A quorum refers to the minimum acceptable level of individuals with a vested interest in a company needed to make the proceedings of a meeting valid under the corporate charter. This clause or general agreement ensures there is sufficient representation present at meetings before any changes can be made by the board.

A quorum normally consists of a group that is considered as large as possible to be depended on to attend all corporate meetings, which is a qualitative assessment. The plural of a quorum is "quora."

How a Quorum Works

Since there is no strict number that constitutes a quorum, best practices suggest a quorum is established as a simple majority of members within an organization. It is also possible to outline a hard number in the by-laws of a company, in which case it overrides the simple majority if that number is larger. It is important that the number decided on is not so small that it doesn't accurately represent the entirety of the members, but not so large that it becomes hard to legally hold a meeting.

Regardless, the quorum number should be representative of members in a decision-making role. If, for example, a company has ten board members, a quorum could be a simple majority of six board members rather than 51% of every shareholder in the company.

Tips to Reach a Quorum

Meetings are most effective and the decision-making process is most efficient when quorum is met and agenda items needing to be voted on can be handled. There are several ways a governing body can ensure quorum is met:

• Provide enough notice to attendees. This includes leveraging e-mail calendars and sending invitations well in advance of the meeting day.
• Choose times and days that work for members. This includes taking a survey of members, being conscious of other competing activities that may occur during certain times, and coordinating across all members.
• Set recurring meeting times. In time, members become more likely to recognize to hold that specific time and not double-book themselves. For example, a board that meets the second Wednesday every month should become a routine day to hold.
• Send personal reminders. In advance of meeting times, send personal notes and e-mails reminding others of the meeting and motivating others to attend.
• Evaluate meeting frequency. Sometimes, members are less likely to attend if meetings are overwhelming or too frequent. If possible, scale back meeting quantities and become more efficient when asking for other people's time.
• Be flexible with attendance options. Some bylaws may state that calling in via phone or video conferencing still constitute as eligible attendance. While some members may not be able to attend in person, they may still contribute to quorum given flexible attendance options.
• Investigate poor attendance. Some specific members may simply not be adhering to their governing duties by not attending meetings enough. Encourage member-wide participation, and directly communicate with members not holding up their end of the agreement.

What to Do When There Is No Quorum

The idea and guidelines of a quorum were set by "Robert's Rules of Order." These rules were implemented to help protect organizations from the decision-making power of a select few who might be uninformed or duplicitous. However, when a quorum is not met during a meeting, the existing attendees are allowed to conduct up to four actions on behalf of the company.

1. Adjust the Meeting Time. When a quorum is not met, attendees of a meeting can adjust the established time for the meeting's adjournment. Doing so allows the company and its members to reschedule the existing meeting to a later date when more people can attend.
2. Adjourn and Push Agenda. The existing attendees can simply adjourn the meeting and try again at an upcoming meeting that is already scheduled. This occurs if there were regularly scheduled budget meetings, for example, and the posed budgeting decision is not time-sensitive.
3. Recess and Delay. The least painful action is a simple recess in which the existing members of a meeting pause for a break in the hopes additional members show or are rounded up. This normally happens if some members leave on their own for a break and a quorum is not met mid-meeting or if there is a known temporary delay of other members.
4. Enact a Privileged Motion. A privileged motion can be called under special circumstances where additional measures can be taken to establish a quorum. A committee can be formed, for example, to call absent members.

Examples of a Quorum

Microsoft's Quorum

Microsoft (MSFT) has established quorum rules for its shareholders and board of directors. The company's bylaws state that the shareholders' quorum is the "majority in interest of all the shares entitled to vote on a matter." Generally, when voting, whatever the majority of the quorum votes for is approved.

For the Board of Directors, a quorum is the majority of the members of the Board. When a quorum is present during a meeting, the majority of members in attendance are permitted to decide on questions brought before them, except for those otherwise restricted by the company's bylaws. If the quorum is not present during a meeting, the members in attendance can adjourn the meeting.

Apple's Quorum

Concerning its shareholders, Apple (AAPL) defines its quorum as the majority shareholders in attendance, in person or by proxy, who are entitled to vote on related matters. Shareholders can transact business when a quorum is present until adjourned. If during that meeting, there are no longer enough shareholders to constitute a quorum, the meeting may continue and decisions can stand if approved by a majority of the shares required for the quorum.

Apple's quorum of Directors is the majority of the authorized number of directors. Decisions made by a majority of the directors when a quorum is present are approved. Transactions may continue when the quorum is initially present but later dismissed if the majority of the quorum approves. The meeting may be adjourned by the majority of directors present even if the quorum is not.

The Bottom Line

A quorum is the minimum number of people needed to hold meetings or make decisions during certain company meetings. Most often, the quorum is considered the majority of members within a group or organization. A designation too small risks inadequately representing the whole, and a designation too large risks the inability to hold meetings and make decisions. Robert's Rules of Order provide a blueprint from which organizations can form their quorum.