What happens when a nonprofit board voting on an action is deadlocked with the same number of votes in favor of an action as the number of votes opposed to it? Nothing. In effect, the nays have it since the proposed action has not been approved.

Sometimes, that’s enough. The status quo prevails.

But other times, that may mean there’s no path forward. This might occur where the vote is on Option A or Option B and no other option is practically available. For example, the vote is whether to hire Candidate A or Candidate B as CEO.

Failing to make this decision may leave the corporation out of compliance. The board members may be held in breach of their fiduciary duties if they can’t successfully address the issue and comply with the requirement that the corporation have a CEO. Meanwhile, the corporation may be harmed because of the prolonged absence of a CEO, including by breaching contracts that include an obligation that the corporation remain in compliance with applicable laws. Further, the issue, if not quickly resolved, has likely left the board members in conflict, making other governance discussion and decisions equally contentious.

What is a nonprofit to do? And how can it avoid getting into this mess?

Some boards set the authorized number of directors at an odd number, which would minimize the likelihood of a deadlock. But if one director has a material financial interest in the transaction being voted upon or another conflict of interest causing them to abstain from the vote (e.g., the director is the candidate for the CEO position being voted upon), that may still leave the board deadlocked.

Some jurisdictions (including Canada) allow the bylaws to provide the Chair with a second or casting vote to break ties. California does not permit casting votes (see, e.g., Section 5211(c) of the California Nonprofit Public Benefit Corporation Law provides in pertinent part: “Each director shall have one vote on each matter presented to the board of directors for action.”). In contrast, Delaware allows for a casting vote, but only if such a provision is included in the Certificate of Incorporation (see, e.g., Section 141(d) of the Delaware General Corporation Law provides in pertinent part: “[T]he certificate of incorporation may confer upon 1 or more directors, whether or not elected separately by the holders of any class or series of stock, voting powers greater than or less than those of other directors.”).

There has been a general move away from casting votes because they suggest that it’s acceptable for the directors not to have equal authority (and consequently standards of care), they concentrate too much power on the Chair, and they discourage healthy deliberation on contentious issues.

One structural alternative to a casting vote provision may be a provision requiring a deadlocked board to send the matter to a committee for further deliberation and recommendation. If the board remains deadlocked after the committee review, the bylaws might delegate authority to the committee, the CEO, or a staff leadership team to make the decision. Whether this governance structure would work depends on applicable law (e.g., some matters may not be delegable to a committee) and whether such delegation would be considered a breach of the directors’ fiduciary duties (e.g., because the matter is of critical importance to the corporation’s existence).