The Inspector of Elections–A Refresher

Of all the items on a company’s annual meeting checklist, the role of the inspector of elections gets perhaps the least attention. Fortunately, this function requires little attention or supervision most of the time. Occasionally, however, the inspector of elections can play a crucial role. Therefore, a refresher may be useful.

Why have an inspector of elections?

First of all, both the Delaware General Corporation Law (Section 231) and the Model Business Corporations Act (Section 7.29) require that all public companies have at least one inspector of elections for every shareholder meeting (both annual and special). Secondly, most public company bylaws mirror the corporate statues by likewise imposing a similar requirement. Therefore, engaging an inspector of elections is likely to be mandatory for a public company’s shareholder meetings.

What does the inspector of elections do?

Corporate laws, and perhaps the company’s bylaws as well, spell out the inspector’s duties, which generally are as follows:

  • Determine the number of shares outstanding and such shares’ voting power;
  • Determine if a quorum to conduct the business at hand is present;
  • Determine the validity of shareholder votes cast;
  • Tabulate the votes cast;
  • Rule on, and retain a record of the disposition of, any disputes regarding vote validity or tabulation;
  • Certify the voting results; and
  • As required by a few states, announce when the polls open and close at the meeting.

Inspectors of elections also must swear in writing at each meeting to execute their duties diligently and impartially.

Are there special qualifications to be the inspector of elections?

Oddly enough, no. Essentially, anyone can serve as an inspector of elections. However, a public company will want to confirm that its inspector is competent to perform the mandated duties and is sufficiently independent to withstand any post-meeting challenges to the voting results (i.e., company employees, retirees or regular service providers are not ideal).

Most of the time, of course, the inspector of elections performs its duties with little fanfare, and its qualifications and performance are not questioned. In the case of contested votes, or perhaps votes with great significance that are expected to be close, the inspector of elections may play a crucial role. In such cases, companies may want to confirm ahead of time its inspector’s credentials and independence, using only an inspector of elections with widely recognized expertise. In some situations, the company may even want to engage more than one inspector of elections to enhance the integrity of the voting process and the credibility of its results.