How a WSBA Section Committee Can Change the Rules of the Game

Section members discussing draft legislation during a meeting

It was about 5 p.m. on a Friday, and I could see the jagged ridges of the Cascades clearly from my office. I took it as an unmistakable sign that it was time to head out for the day. But just as I was packing up, the phone rang.

On the other end of the line was the chair of the Judiciary Committee of the Washington State House of Representatives, who wanted to talk about an out-of-state organization that intended to introduce a bill in the our state legislature that would make significant changes to the Washington Business Corporation Act. He relayed that he’d let the organization know that no proposed changes to the Corporate Act would ever make it through the Judiciary Committee unless they first went through the refining fire of the WSBA Business Law Section’s Corporate Act Revision Committee.

Despite the allure of the mountains outside my window, with that call I repacked my things and got to work.

One of the most important, and perhaps least understood, purposes of the WSBA’s Business Law Section is to participate in the development of state legislation in order to improve and facilitate the administration of justice in business law—to the benefit of both section members and their clients. So when it came to the Corporate Act, the job of developing legislation goes through our committee. By playing this important and fundamental role in the process of carefully tending the Corporate Act, members of our committee are able to have a significant voice in the rules of corporate practice in Washington.

The Corporate Act Revision Committee is one piece of the Business Law Section with approximately 10-15 corporate attorneys who practice at large and small law firms, in-house counsel at Washington corporations, professors at Washington law schools, and representatives from the Washington Secretary of State’s office. In fact, our committee was instrumental in developing the Washington Business Corporation Act, from before it was adopted 30 years ago, as well as ongoing reexaminations to consider the need for changes in light of developments in corporate laws and practices, judicial decisions, and regulatory actions.

Given the deep involvement and countless volunteer hours by our committee to refine the practice corporate law in this state for decades, it’s no surprise the Judiciary Committee chair came to us when there was word of proposed amendments. Here’s what our committee does and how we developed that reputation.

Section-House Rock: What Happens Even Before it’s ‘Just a Bill’

To determine which issues will receive the focus of our committee, we review changes in corporate law in other states, judicial decisions in Washington, and elsewhere; changes in corporate practice; and requests for technical or other amendments to the Corporate Act we receive from WSBA members. Once we decide to address an issue, we generally work on the proposed amendments for a year or more. We reach out to affected stakeholders in the Washington legal world and also in the business world for feedback, which we then consider when preparing a final package of amendments. The proposed package of amendments is sent for approval to the executive committee of the Business Law Section, then to the WSBA Legislative Review Committee, and finally to the WSBA Board of Governors.

Each step in the approval process requires a member of the committee to present the proposed changes to the group, and to respond to questions from other members. If all goes well, our
proposed changes are adopted by the State Senate and House and are signed into law by the Governor at the end of the legislative session.

If the proposed package of amendments eventually obtains approval from the Board of Governors, we work to enlist at least one senator and one house member to sponsor a bill containing the package of amendments. A member of our committee will testify at each of the House Civil Rights and Judiciary Committee and the Senate Law and Justice Committee, again presenting the proposed changes to the committee and responding to questions from committee members as well as any testimony against the proposed changes.

For the corporate act, this process has repeated several times over the last three decades, regularly drafting and shepherding packages of amendments to improve and update the law. Some of the more notable recent changes we’ve proposed, and the Legislature has adopted, include:

  • Enabling virtual annual meetings (2018)
  • Providing for ratification of defective corporate actions (2017)
  • Authorizing forum selection provisions (2017)
  • Enabling waivers of corporate opportunities (2015)
  • Providing for domestication and conversion of corporations (2014)
  • Creating social purpose corporations (2012)

For the 2019-2020 legislative session, we prepared a package of amendments that resulted in the creation of Senate Bill 5003, which would change the default rule from an “opt out” approach to an “opt in” approach for both preemptive rights and cumulative voting. If adopted, the bill would also change the subjective “all or substantially all” test for determining whether shareholders must approve a sale of corporate asset to an objective “significant continuing business activity” test.

Enthusiastic participation in a section or committee can be one of the best ways to enhance your professional development through the ability to associate with state government officials and private and academic lawyers, as well as a venue for exchanging ideas and insights on interesting and meaningful aspects of practicing law. Being a part of a WSBA section, and particularly a member of an executive committee such as ours provides a unique opportunity to make and change laws and to play a meaningful role in the WSBA and legislative processes—even if the call comes in at 5 p.m. on a Friday.

Section Leaders Wanted

There’s still time to apply to serve on one of the many Section Executive Committees (including the Business Law Section featured here). To apply, visit your myWSBA profile and click on “Section Executive Committee Application” under Connect & Serve. Many Executive Committee applications are due by March 29. You can find more information on the open Executive Committee seats by navigating to Take a Seat on Your Section’s Executive Committee.