Clubs have devised several different systems for voting on motions during the club meeting. Whatever method the club members decide to use, it should be stipulated in the Partnership Agreement. The traditional method that some use is to weight the vote by percentage of each member's ownership in the club. This has the advantage of protecting the accumulated value of long-term members, by giving them somewhat more control over the actions of the club. The intent is to limit the influence of younger, less-experienced members who may want to lead the club into more "exciting" but inappropriate speculative investments. One obvious disadvantage is that tallying the votes is a bit more awkward. Another is that the newer members may resent the idea that their participation may be seen as having no value beyond their dollar contributions. If voting is conducted on the basis of percentage of membership in the club, another question that should be considered is whether to set a cap on the percentage that can be voted by any one member. A simpler and probably more common procedure is to assume that all members are equal*, so each member's vote carries the same weight. The obvious advantage is its simplicity. To some, the disadvantage in this method is that it does not address the concerns met by the weighted voting discussed earlier. Some clubs resolve the issue of influence over the results by specifying that each member has one vote, but that any member may call for a weighted vote if they disagree with the result of the first vote. If the club has established an investment philosophy with which all members are in agreement, it is unlikely that a weighted vote will be requested often, if at all. An important issue that should be considered is the degree to which the club's decisions may be influenced by one or more members who are looked up to as being more experienced. This problem may become obvious when the same few members routinely dominate the discussions, or if the votes are almost always unanimous. One possible solution is to require secret ballots, so no member needs to feel intimidated into casting a vote that they would not otherwise make.
*Giving all members equal voting rights does not require that all members have exactly the same amount of money invested. Club accounting software easily accommodates members who have different numbers of shares (valuation units) in the club. Attempting to require that all members have exactly equal dollar values in the club is unnecessary, and in the end self-defeating. But that's a different issue from the members' decision about how to tally the votes.
For more information on club organization and management, see:
Comment on this Page Last Modified 2008-08-14 |
Hide Tools |