Post-COVID-19: Do We Still Need To Be In The Room Where It Happens?

By Carol Nolan Drake, J.D., Skytop Contributor, May 29, 2020

With credit to Lin-Manuel Miranda, post-COVID-19, do we still need to be in the room where it
happens?1 Are in-person board meetings, with requirements for quorum and voting conditions a thing of the past? Is a brick and mortar building really the only place to conduct business? Or will a combination of live meetings under social distancing practices and virtual discussions become the new norm? If so, how will businesses address the definition of board members being “present” to conduct official business? There are so many questions that need answers.*

In this new “limited contact” world, a company’s board of directors has had to quickly make decisions to preserve the liquidity of the company, address the needs of employees and customers, and maintain a commitment to investors and creditors. For boards of directors operating within global, national, state and city restrictions, the recent discussions in the U.S. Congress may provide insights for consideration, particularly for companies that had not made the transition to virtual meetings before the pandemic. 

Similar questions are being asked and discussed in Congress. Under the U.S. Constitution, did the drafters intend to require Congressional members to meet in person even under emergency situations to pass urgent legislation? Should Congress consider the existing protocols and change how they will handle legislative action to address the pandemic or the next declared emergency? Does governing only take place in a building of marble columns and statuary? 

As our world has learned from COVID-19, the situation can transform quickly and an actual required presence to vote could impact many people’s lives. Would authorizing some type of remote voting fundamentally change the nature of legislating that our Founding Fathers intended?

Congressional Action

While the U.S. Constitution contains Article 1 to govern the assemblage of the U.S. House of Representatives (House) and Senate, the language provides both the House and Senate some leeway to set rules governing the conduct of these sessions:

U.S. Constitution Article 1, Section 5

Each House shall be the Judge of the Elections, Returns and Qualifications of its own Members, and a Majority of each shall constitute a Quorum to do Business; but a smaller Number may adjourn from day to day, and may be authorized to compel the Attendance of absent Members, in such Manner, and under such Penalties as each House may provide.

Each House may determine the Rules of its Proceedings, punish its Members for disorderly Behaviour, and, with the Concurrence of two thirds, expel a Member. 

Neither House, during the Session of Congress, shall, without the Consent of the other, adjourn for more than three days, nor to any other Place than that in which the two Houses shall be sitting.2 (Italics added)

With respect to a protocol for permitting remote voting by members, the House of Representatives has acted and the Senate is considering rule changes and technology to provide the security measures necessary. 

U.S. House of Representatives

The House voted on May 15, 2020 to allow the Speaker of the House to call for remote voting under specific circumstances. House Resolution 965 was passed 217-189, with three Democrats joining Republicans to vote against it. The Resolution: 

[A]uthorizes and otherwise sets forth procedures for remote voting by proxy in the House of Representatives and provides for official remote committee proceedings during a public health emergency due to a novel coronavirus (e.g., the virus that causes COVID-19) for a 45-day period. Based on the status of the public health emergency, the 45-day period may be extended for an additional 45 days or terminated earlier.

The chair of the Committee on House Administration shall study the feasibility of using technology to conduct remote voting and certify to the House that operable and secure technology exists to conduct such activity.3

On Wednesday, May 20, 2020, Speaker Pelosi called for the House to prepare for remote voting, if necessary, and Committee activity during a 45-day period after the Memorial Day holiday, based upon this authority. The 45-working period may be renewed as necessary. Under the rules, the Speaker received notification from the House Sergeant-at-Arms, in consultation with the Capitol Physician that the COVID-19 health emergency has continued. The rule change “allows members of Congress to provide another member with the authority, or ‘proxy’ to vote for him or her.” Congressional members who live nearer to Washington, D.C. are reporting that they are receiving requests to be proxies for members who live further away.­4

In an interview, House Majority Leader Steny Hoyer (D-MD) said, “This is no revolutionary, radical change. This is exactly what the founders wanted to happen.”5 The issue came to the forefront in March, when Rep. Thomas Massie (R-KY) objected to the House authorizing a bill by unanimous consent. With his announcement, the House leadership scrambled to have a quorum of members present for the vote to pass the $2.2 trillion bill for coronavirus relief. Members traveled to Washington, D.C. to ensure the quorum requirements of at least 218 members were met and in the last minutes of session, a voice vote was recorded to pass the bill.6

For the first time under the newly passed Resolution, the House has operated this week under the remote voting procedures. According to news reports, “Under the resolution, absent members must send a letter to the House clerk designating another member to vote for them, which can be revoked at any time. Members can act as proxies for up to 10 absent colleagues. Before a vote, the absent member has to provide exact instructions about how the proxy should vote, and the proxy is required to announce their intentions on the House floor before voting.”7

Democrats, led by House Committee on Rules Chairman Jim McGovern (D-MA), “cited opinions from constitutional law experts in support of the change. At least 50 Democrats have filed with the clerk’s office saying they plan to use the system this week.”8

On Tuesday evening, May 26, House Republicans filed suit to block the use of proxy voting. In the case, McCarthy v. Pelosi, 20-cv-01395 (2020), filed in the U.S. District Court, District of Columbia (Washington), House Minority Leader Kevin McCarthy (R-CA) as lead plaintiff, joined by Reps. Steve Scalise (R-LA), Jim Jordan (R-OH), Liz Cheney (R-WY), Tom Cole (R-OK) and 16 other plaintiffs, including four constituents, to sue Speaker Nancy Pelosi (D-CA) and other named defendants.9 The suit alleges that the adopted proxy voting process is unconstitutional. The case is pending and the court has not issued an order as of this date to stay proxy voting. 

On Wednesday, May 27, the House exercised proxy voting under the terms of the Resolution. The exercise of proxy voting was made by 72 Democrats, who requested colleagues vote on their behalf.10 There were no Republicans who requested proxy voting. House Minority Whip Steve Scalise (R-LA) encouraged Republican members to remain in Washington, D.C. and vote in person or submit their votes to be memorialized in the Congressional Record.11

U.S. Senate 

The Senate has conducted a Roundtable discussion on Senate Resolution 548,12 introduced by Senator Rob Portman (R-OH), cosponsored by Senator Dick Durbin (D-CT), on March 19, 2020, and 15 Senators from 13 states (7 Republicans; 7 Democrats, 2 Independents) as of this date, and referred to the Senate Committee on Rules and Administration. The Resolution language would:

[Amend] the Standing Rules of the Senate to enable the participation of absent Senators during a national crisis. Resolved, That 

SECTION 1. Participation of absent Senators during a national crisis.

Rule XII of the Standing Rules of the Senate is amended by adding at the end the following:

“ 5. Senators may use technology that has been approved by the Secretary of the Senate and Sergeant at Arms and Director of the Doorkeepers as reliable and secure to cast their votes from outside of the Senate Chamber if the majority leader or his or her designee and the minority leader or his or her designee determine that an extraordinary crisis of national extent exists in which it would be infeasible for Senators to cast their votes in person. Senators in such circumstance may then cast votes under this paragraph only during the 30-day period beginning on the date on which such determination is made unless such period is renewed by an affirmative vote of three-fifths of the Senators duly chosen and sworn. During such period, Senators participating remotely and using approved technology to cast their votes under this paragraph shall be deemed present for quorum purposes. The determination made under this paragraph shall not rely on any decision of any other branch of the United States Government. The majority leader or his or her designee and the minority leader or his or her designee shall submit at the beginning of the first session of each Congress an order for designees of each caucus in the case of such a crisis.”

On April 30, 2020, the Senate Committee on Homeland Security and Governmental Affairs, Permanent Subcommittee on Investigations held an online Roundtable entitled, “Continuity of Senate Operations and Remote Voting in Times of Crisis.” Chairman of the Subcommittee, Senator Portman, opened the Roundtable, noting that “this the first-ever virtual hearing in the history of the U.S. Senate.” Ranking Member Senator Thomas Carper (D-DE) provided his remarks, stating, “It may be that unanimous consent is no longer an option; however, inaction is not an option either. So if a remote voting system for the Senate allows us to move to the next stage in our response to COVID-19, we need to consider it.”13

Three witnesses offered testimony during the Roundtable to discuss remote voting, security and innovative technology. The witnesses were Martin B. Gold, Partner, Capitol Counsel; LLC; Lorelei Kelly, Director of Congressional Modernization, Beeck Center for Social Impact and Innovation, Georgetown University; and Joshua C. Huder, Ph.D., Senior Fellow, The Government Affairs Institute, Georgetown University.

In the staff memorandum for the Subcommittee, released on April 29, it said:

The COVID-19 virus has shut down major sectors of our society, including many functions of Congress.  By rule and custom, the two chambers of Congress have always met in person to conduct business, including committee hearings, floor deliberation, and voting.  Neither chamber has contingency plans that allow those functions to proceed remotely, but this crisis highlights the need to consider means for Congress to do its job at times when it may not be safe for members and staff to gather in person.

Remote participation should never take the place of in-person participation except in the most limited circumstances—crises, affecting the entire country, that would otherwise hobble Congress’s ability to act without this authority.  The current nationwide pandemic requires Congress to consider how best to continue its operations, communicate, and pass necessary legislation safely.  Subcommittee Chairman Rob Portman and Senator Richard Durbin, for example, have introduced a proposal to allow the Senate to conduct business remotely during times of nationwide emergency….

In order to further tether remote participation and voting to crisis conditions, as well as prevent the normalization of its use, the resolution would only permit remote activities for a brief period of time.  Once the Senate leadership determines that the two conditions for remote participation and voting have been met, senators could only participate and vote remotely for 30 days.  Should a continuation of the crisis require it, the Senate could vote to extend remote participation and voting for an additional 30 days, but only with the concurrence of three-fifths of the Senate. 

The resolution would permit senators participating remotely to count towards a quorum.  The Constitution requires a quorum to conduct business, and stipulates that a majority of senators constitute a quorum.  The resolution makes clear, however, that senators must actually be participating in order to count toward a quorum.  Senators not in the chamber nor “logged on” to the remote voting system would not be counted towards a quorum.  Finally, the resolution would delegate responsibility to the Sergeant at Arms, the Secretary of the Senate, and the Director of the Doorkeepers for approving any system that the Senate uses to enable remote voting and deliberation.14

The tools under consideration involve blockchain technology for the necessary encryption to secure voting from the Senators’ locations. Similar to the House’s rules, the decision rests with the Sergeant-At-Arms. The staff memo highlighted three principles in technology security that the Senate should consider for remote voting: encryption, authentication and verification. For encryption, the ideas of end-to-end encryption, blockchain technology, and the ‘Joint Worldwide Intelligence Communication System Remote Voting Tool’ – used for top-secret communications currently – were recommended for consideration by the Sergeant-At-Arms.15 On the benefits of using blockchain, the memo noted, “With its encrypted distributed ledger, blockchain can both transmit a vote securely and also verify the correct vote.”16

The Memorandum also mentioned a remote voting proposal offered by Senator Rand Paul (R-KY) which has not been introduced as of this date. According to the proposal, any Senator would be allowed to make a privileged motion to authorize a period of up to 30 days to allow Senators to cast votes outside of the Senate Chamber using technology approved by the Secretary of the Senate, Sergeant at Arms, and Doorkeeper of the Senate. The proposal would limit consideration of the motion to two hours of debate and only allow amendments to change the length of time of remote voting. The motion to authorize remote voting would require a three-fourths majority vote. Senators who cast remote votes would be counted toward a quorum.17

The Memorandum contains a detailed legal analysis of the related Constitutional provisions and U.S. Supreme Court and lower court interpretations in rulings that are important to consider. After a review of Congress’ broad discretion and the deference paid by the courts, it concluded: 

Given the Constitution’s broad grant of authority to Congress to set its own rules of proceedings and the efficacy of today’s technology to allow for robust debate and secure transmission of votes, it appears likely that courts would uphold a Senate rule allowing remote participation and voting during times of nationwide emergencies.18

Shortly after the Roundtable, on May 7, Senator Portman published an Op-Ed on the Fox News platform, entitled “During coronavirus pandemic, Congress should work remotely to prevent disease spread.” In it, he said, 

In times of crisis, congressional proceedings no longer need to be confined to a cramped hearing room in the Capitol building. In fact, several committees are now considering holding virtual hearings this week, because even though the Senate is in session, social distancing guidelines favor a remote process.

The Constitution and Supreme Court precedent make clear that the Senate may set is own rules for how it operates, and creating a temporary remote voting system is no exception.19

The Senate continues to discuss the potential for remote voting. Senate Majority Leader Mitch McConnell (R-KY) has questioned whether the Senate should act on the Resolution.

For Boards of Directors

What can Boards of Directors, who are discussing remote board meetings, learn from the U.S. House and Senate discussions? There are at least four areas of consideration:

  1. Review existing board documents– While Boards may not have to address federal constitutionality questions relating to remote board discussions or voting, there may be state laws, federal legislative and regulatory requirements to consider. A thorough review of state laws in which the Articles of Incorporation were filed, Company Bylaws, Board Charters and related filings should be conducted. Provisions in director insurance documents may require changes. Any revisions or amendments should explain the Board’s quorum requirements, how excused absences for board members will be counted and if any special meeting notices must be announced. Consider whether the documents need to be revised and filed with regulatory agencies.
  2. Determine the technology needs for virtual meetings that support the company’s business model- Cyber criminals have taken notice of the increased need for virtual platforms to conduct business, particularly between management and employees, and exploited any weaknesses. The House and Senate have considered the levels of technology that are needed for their purposes. The Board members, leadership team and employees may be working from home and need access to sensitive information as they continue to work. Technology to secure transmissions of sensitive data, including financial arrangements, must be ensured.
  3. Seek out opinions– The House and Senate have looked at several examples of proxy voting procedures and technology to secure a member’s vote. Every company has had to deal with COVID-19 in some way or another. Your peers may have come up with temporary solutions that are worth modeling or considering. Companies are commanding the news headlines with good (and not so great) examples how they are dealing with the coronavirus. Find out what your investors, customers, stakeholders, and employees think about the company’s response and plans going forward. Protecting employees and customers has become the number one issue and investors are asking serious questions about human capital management.
  4. Prepare for the next emergency– Congress is continuing to consider the viewpoints of health care experts to understand when the next wave of coronavirus might occur and the continued impact on Americans and the economy. The federal regulatory agencies such as the Securities and Exchange Commission are providing guidance for issuers and investors.20 The experiences which companies, employees and customers have faced since the beginning of the pandemic should be memorialized; it can help everyone be more prepared for the future.

Final Thoughts

While the bands of democracy may seem tighter in Washington, even Congress is aware that their governance models will need to be modified. The ensuing discussions have revealed that members may not need to be in the same room for Committee hearings or to vote in their respective chambers to pass legislation. A similar change of protocols for company Boards of Directors may also need to be considered. Directors who are used to attending board meetings personally may miss the collegiality of in-person discussions. While they may prefer to be in the room where decisions happen, the ability to conduct business remotely during the pandemic may be a sensible and safer decision.

 

Author:

Carol Nolan Drake, J.D.
Founder & President/CEO


Carlow Consulting, LLC
Inquiries: info@skytopstrategies.com

Endnotes

*This posting does not cover virtual Annual General Meetings. Many comprehensive articles have been written about these recent meetings. 

1“The Room Where it Happens,” Hamilton musical, lyrics and music by Lin-Manuel Miranda, 2015.

2 U.S. Constitution. https://constitution.congress.gov/constitution/

3 H.Res. 965, passed in the U.S. House of Representatives on May 15, 2020.  https://www.congress.gov/bill/116th-congress/house-resolution/965?q=%7B%22search%22%3A%5B%22remote+voting%22%5D%7D&s=1&r=1

See also The Hill, Pelosi Formally Authorizes Covered Period for Remote Voting, by Cristina Marcos, May 20, 2020. https://thehill.com/homenews/house/498742-pelosi-formally-authorizes-covered-period-for-remote-voting; CBS News, May 20, 2020, by Grace Segers,  Pelosi triggers rule allowing remote voting in the House for 45 days. https://www.cbsnews.com/news/house-remote-voting-by-proxy-pelosi-45-day-period/

4 The Hill, House members race to prepare for first-ever remote votes, by Cristina Marcos, May 25, 2020. https://thehill.com/homenews/house/499257-house-members-race-to-prepare-for-first-ever-remote-votes

5 Associated Press, It’s a Work From Home Congress As House Approves Proxy Vote, by Lisa Mascaro, May 16, 2020. https://www.msn.com/en-us/news/politics/its-a-work-from-home-congress-as-house-approves-proxy-vote/ar-BB149wvK

6 CBS News, GOP congressman defends demand for House vote on $2.2 trillion coronavirus bill, by Grace Segers, March 31, 2020. https://www.cbsnews.com/news/coronavirus-bill-thomas-massie-defends-demand-for-vote/

7 The Hill, Pelosi Formally Authorizes Covered Period for Remote Voting, by Cristina Marcos, May 20, 2020. https://thehill.com/homenews/house/498742-pelosi-formally-authorizes-covered-period-for-remote-voting

8Bloomberg News, House Republicans Go to Court to Try to Stop Proxy Voting, by Billy House and Erik Wasson, May 26, 2020. https://www.bloomberg.com/news/articles/2020-05-26/gop-plans-court-challenge-to-house-move-to-allow-proxy-voting

9 Newsweek, House Republicans Sue to Stop Historic Proxy Voting Plan Designed to Reduce Lawmakers Risk of Getting Coronavirus, May 27, 2020, by Elizabeth Crisp. https://www.newsweek.com/house-republicans-sue-stop-historic-proxy-voting-plan-designed-reduce-lawmakers-risk-getting-1506934 

10 Roll Call, First proxy votes cast in the House despite GOP opposition, lawsuit by Katherine Tully-McManus, May 27, 2020. https://www.rollcall.com/2020/05/27/first-proxy-votes-cast-in-the-house-despite-gop-opposition-lawsuit/?utm_source=&utm_medium=email&utm_campaign=newsletters&utm_content=05/27/2020

11 Politico, House Republicans plan to sue Pelosi over proxy voting, by Melanie Zanona, Heather Caygle and Sarah Ferris, May 26, 2020. https://www.politico.com/news/2020/05/26/house-returns-business-far-from-normal-282004

12Senate Resolution 548. https://www.congress.gov/bill/116th-congress/senate-resolution/548?q=%7B%22search%22%3A%5B%22s.Res.548%22%5D%7D&s=1&r=1

13 Member Statements Chairman Rob Portman R (OH) Download Statement (54 KB); Senator Thomas R. Carper D (DE) Download Statement (40.6 KB); Martin B. Gold, Partner Capitol Counsel, LLC Download Testimony (150.4 KB); Lorelei Kelly, Director of Congressional Modernization, Beeck Center for Social Impact and Innovation, Georgetown University Download Testimony (106.1 KB); Joshua C. Huder, Ph.D., Senior Fellow, The Government Affairs Institute, Georgetown University Download Testimony (155.8 KB).

https://www.hsgac.senate.gov/subcommittees/investigations/hearings/roundtable_-continuity-of-senate-operations-and-remote-voting-in-times-of-crisis

14 Permanent Subcommittee on Investigations Staff Memorandum, Roundtable on Continuity of Senate Operations and Remote Voting in Times of Crisis, p. 7. https://www.hsgac.senate.gov/imo/media/doc/2020-04-30%20PSI%20Staff%20Memorandum%20-%20Remote%20Senate%20Process%20-%20Final.pdf

15 PSI Staff Memorandum, p. 23.

16 PSI Staff Memorandum, p. 25.

 17 Senator Rand Paul Proposal,  in PSI Staff Memorandum, pp. 7-8. 

18 PSI Staff Memorandum, p. 8.

19 Fox News Op-Ed by Senator Rob Portman, “During coronavirus pandemic, Congress should work remotely to prevent disease spread,” May 7, 2020. https://www.foxnews.com/opinion/sen-rob-portman-during-coronavirus-pandemic-congress-should-work-remotely-to-prevent-disease-spread

20 SEC Coronavirus (COVID-19) Response. https://www.sec.gov/sec-coronavirus-covid-19-response