NAR directors may face eligibility and performance requirements

SAN FRANCISCO — Should directors of the National Association of Realtors be active, producing agents? Should they be required to attend NAR board meetings? Should NAR verify they’ve actually read their meeting packets before showing up for a vote?

The trade group’s directors may face eligibility and performance standards in the future if rank-and-file members have their way.

NAR’s decision-making machinery is enormous. At 800 members, NAR’s board of directors is bigger than Congress. For the 1.3 million-member trade group to adopt a policy, that policy must run the gauntlet of NAR’s governance structure, which includes more than 90 committees, advisory boards, councils and forums comprised of thousands of Realtor volunteers.

As part of NAR’s strategic framework, which calls for NAR to “be a nimble, decisive leader in shaping the future of real estate,” last year NAR 2018 President Elizabeth Mendenhall formed the Governance Game Changer Presidential Advisory Group (PAG), which is made up of more than 50 appointed members and association executives who will serve on the group over its three-year term.

NAR 2019 President John Smaby, NAR 2019 President-Elect Vince Malta, and NAR 2019 First Vice President Charlie Oppler have committed to working with the advisory group as it carries out its work.

Much of the PAG’s work involves getting feedback from NAR members on what they think of the trade group’s current governance structure.

“It’s not about the board size,” Terrie Suit, vice chair of the PAG, told hundreds of Realtors at a “Your NAR, Your Way” forum at NAR’s annual conference, the Realtors Conference & Expo, on Thursday afternoon.

“We want to make sure that the members have an opportunity to give us your input. We don’t want to make decisions behind closed doors,” she added.

After holding forums and surveying members, some key pain points that have surfaced include:

• NAR’s ability to be proactive and nimble
• the board’s ability to have substantive discussions
• lack of understanding of the purpose and authority of governing bodies
• lack of clear direction and expectations of committee work
• lack of clear pathways to be involved or engaged with NAR
• lack of clear qualifications and performance expectations
• lack of opportunities for engagement outside of NAR’s two annual conferences

As part of Thursday’s forum, PAG members asked three questions regarding NAR’s directors. The first was:

1. Choose all of the following qualifications you think would be meaningful as a guideline for serving on the Board of Directors:

A. Service on NAR committee or NAR body
B. Service in a leadership or volunteer role at the local or state association level
C. Currently an active, producing Realtor
D. A minimum of X years as a member of NAR
E. A minimum of X years in real estate or related industry
F. None of the above

The most popular option — “Service in a leadership or volunteer role at the local or state association level” — was chosen by 29 percent of forum attendees, who voted via text message. Twenty percent chose “Service on an NAR committee or NAR body” and 19 percent chose “Currently an active, producing Realtor.” D and E were chosen by 17 percent and 15 percent of attendees, respectively.

But forum attendees also had their own suggestions for qualifications.

“Show up for the meetings,” one said, echoing a common complaint that some directors don’t bother to attend NAR’s bi-annual board meetings, assigning proxies instead. Another suggested that directors sign a form committing to go to meetings and do their homework. Yet another wanted directors to promise to resign if they were not able to fulfill their duties.

One PAG member asked whether they should worry about qualifications that could potentially exclude too many people. But an attendee responded, “I’m interested in quality over quantity.” The qualifications should be the qualifications, even if the board itself turns out to be smaller, she said.

One Realtor asked how the current NAR directors measure up to the qualifications suggested in the question. Suit replied that the PAG hadn’t done that comparison because there aren’t any qualifications now.

NAR’s board is divided into geographic regions. The second question the PAG asked forum attendees was:

2: Choose the statement below you most agree with. The current NAR regional structure …

A. Is an effective way to organize member input and to communicate information back to members.
B. Is outdated and out of sync with how the industry operates and with advancements in communications technology.
C. Should be redrawn based on how the industry and market have shifted to ensure that groupings of states make sense.
D. Should become a more fluid structure where members can organize based on interests, expertise, and geographic concerns as desired.
E. None of the above.

More than half, 51 percent, chose C.

When Suit asked why attendees had chosen C, one Realtor said, “It’s obvious. Our market is ever-changing but our standards aren’t.”

Another suggested that states should be grouped by issues they have in common rather than geography, such as flooding concerns.

Yet another noted that directors spend a whole afternoon in a meeting with other members of their region.

“An afternoon spent talking about flood might be more effective,” she said.

The third question asked about performance expectations for directors. Suit pointed out that attendees at NAR’s midyear conference in May had wondered, “Where’s the accountability?”

3. Choose all of the following performance standards you agree should be in place for members of the NAR Board of Directors.

A. Mandatory participation in orientation and training offered.
B. A strict meeting attendance requirement (with a clear excused absence policy).
C. Confirmation that the Board member opened and reviewed the meeting packet before the meeting.
D. Attendance for the duration of the Board meeting.
E. Votes cast on decisions put before the Board.
F. Mandatory attendance at Director Forums, meetings or training as required.
G. None of the above.

The third suggested standard regarding meeting packets drew chuckles from the audience.

“But in all fairness they don’t get it until the night before,” Suit noted.

“We need to fix that problem too,” a fellow PAG member replied.

All of the suggestions were chosen by between 12 percent and 19 percent of attendees.

“We already do core standards for associations,” so it makes sense to have them for NAR directors, one attendee said.

Asked what standard should be among the suggestions but isn’t, one Realtor said, “How about ‘All of the Above?'”

Another said, “Term limits,” prompting applause from the crowd.

Tom Campbell, a Realtor from Virginia Beach agreed and said it was important for people to have the opportunity to move up.

“You need to have some continuity, but you don’t need to have all continuity,” he said.

Jill Furtado, a Realtor from California, referenced NAR’s political action committee and said, “If we’re going for quality, we should have some requirement for our contributions and our investments in regard to RPAC.” Some attendees clapped.

“There might be some legal questions about that,” Suit replied, adding that the PAG would have to talk to Katie Johnson, NAR’s general counsel.

Another attendee suggested that directors be compelled to give up their phones during the board meeting to ensure they’re paying attention.

But one Realtor stressed that the work the board does should be interactive, use the skills of the director and not replicate work done by others.

“If you don’t want me to text [during a board meeting], it needs to be interesting. I don’t mean you need to entertain me, but it needs to be worthwhile,” she said.

In a “quick poll” toward the end of the forum, 77 percent of attendees agreed that “NAR should provide state and local associations with information on how well their appointees are meeting stated performance expectations.”

The PAG invited any Realtors who would like to share their own thoughts on NAR governance to email governancepag@realtors.org.

Email Andrea V. Brambila.
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